The way that America spends money on health care includes a huge amount of waste. Former head of Medicare and Medicaid, Dr. Donald M. Berwick, said that a large portion of the spending is not benefiting patients. Other countries do not include as much waste in what they spend on health care.
Dr. Donald M. Berwick was the former administrator of the Centers for Medicare and Medicaid Services. He was recently replaced by Marilyn Tavenner. Dr. Berwick was appointed to that position by President Obama, but was never confirmed by the Senate. Instead, he was given a “recess appointment” that officially expires on December 31, 2011.
According to Dr. Donald M. Berwick, up to 30% of the money spent on health is wasted. That is to say, it has “absolutely no benefit” to patients. He feels that the “cumbersome and archaic regulations” that are part of the Centers for Medicare and Medicaid Services agency are partially to blame. Too much time, and too many resources, are dedicated to things that do not help patients, at all.
If it were possible to take that wasted portion (which can be up to 30% of the total money spent on health care), and prevent that waste from occurring, it could save between $150 billion and $250 billion every year. Those billions could be used on things that actually benefit patients.
Berwick has identified some of the biggest reasons why there is such an enormous amount of waste in health spending. Patients are being over treated. In other words, they are receiving more health care, treatments, and tests, than they actually require.
Another problem is that there is not enough coordination of care. I think this must be referring to the group of people who are “dual eligibles”. These people are getting both Medicare and Medicaid. Often, these people end up having to deal with both programs separately, because the two programs do not talk to each other.
Other problems occur because health care in the United States is burdened with an excessively complex administration system. This slows the entire process down. Part of that problem comes from the enormous burden of rules that are woven into the entire health care system. And finally, fraud is another issue that leads to waste in health spending.
The problems with health care in the United States are not happening in other countries. The United Kingdom, for example, has universal healthcare. It covers everyone. The UK is able to spend less than 7% of its country’s GDP on health care. The United States spends more than 17% of its GDP on healthcare. Yet, more than 50 million Americans have absolutely no coverage at all. Tens of millions more have inadequate health insurance coverage.
Image by msburrows on Flickr