Wasteful Medicare Spending Topped $1.9 Billion in 1 Year: Study

MONDAY May 12, 2014, 2014 -- Medicare spent at least $1.9 billion in 2009 on 26 types of tests and procedures that offer patients few or no health benefits, a new study says.

At least one in four Medicare patients received at least one of these services in 2009, according to the analysis of claims made by more than 1.3 million Medicare patients that year, according to Harvard Medical School researchers.

The 26 procedures examined in the study are among hundreds of health care services known to provide little or no medical gain to patients in many cases, the researchers noted.

"We suspect this is just the tip of the iceberg," study author J. Michael McWilliams, associate professor of health care policy, said in a Harvard news release.

"We were surprised that these wasteful services were so prevalent," lead author Aaron Schwartz, an M.D./Ph.D. student in the department of health care policy, said in the news release. "Even just looking at a fraction of wasteful services and using our narrowest definitions of waste, we found that one quarter of Medicare beneficiaries undergo procedures or tests that don't tend to help them get better."

Under the narrower definition, 25 percent of beneficiaries received at least one of the 26 wasteful services, resulting in $1.9 billion. Under the wider definition, 42 percent of beneficiaries received at least one of the 26 wasteful services at a cost of $8.4 billion.

The study was published May 12 in the journal JAMA Internal Medicine.

"One of the things we learned from this study is that measuring waste is hard," Schwartz said. "How much waste you find varies greatly depending on how you define it. Removed from the clinical details of a particular patient, it is hard to know whether a given procedure might be useful or not."

Some of the 26 services included in the study -- such as arthroscopic debridement (surgical removal of tissue) for knee osteoarthritis and a form of back surgery in which collapsed disks are filled with cement -- almost never provide any health benefit to patients, the researchers said.

However, some of the services can be wasteful in some cases but provide important benefits in others. For example, lower back imaging is of little benefit to patients with muscle soreness but can save the lives of patients with cancer or a spinal abscess.

"Because the value of a service depends on the patient, it is challenging to devise payment and coverage policies that limit wasteful care but not valuable care. Some tests and treatments that are wasteful across the board are easy targets -- we can stop paying for them. But for most services, incentives that allow providers greater discretion at the point of care may be needed to cut significant amounts of waste while minimizing unintended consequences," said McWilliams, who is also a practicing general internist at Brigham and Women's Hospital in Boston.

U.S. health care spending is higher than ever and continues to increase. Eliminating wasteful spending in Medicare and throughout the health care system is an important way to reduce costs while improving or at least maintaining quality of care, according to the study authors.

More information

The Kaiser Family Foundation has more on U.S. health care costs.

Posted: May 2014


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