Advocates for Evidence-Based Health Policy Speakers
A Dripping Faucet of Cheap yet Useless Care
The most expensive health care in the world can be found in the United States, where we spend the equivalent of $9,403 on every man, woman, and child. Part of the explanation for that exorbitant spending lies in low-value care or “waste,” with studies estimating that up to one-third of all care is wasteful. Previous research has highlighted expensive services that fail to provide benefit, such as treating osteoarthritis with arthroscopic knee surgery. This study takes a new approach, seeking to understand how a range of 44 potentially low-value services impacted healthcare expenditures in Virginia.
The study’s findings confirm that waste is widespread, with those 44 services representing low-value care 31% of the time they were delivered and one in five beneficiaries receiving at least one low-value service in 2014. The total cost of these wasteful services was $586 million, representing 2.1% of Virginia’s healthcare spending. Now, that figure may pale in comparison to previous estimates of waste, but it is a highly conservative estimate, generated from only the 44 services studied. Moreover, it does not include any secondary costs that may have resulted from the initial low-value service, such as an unnecessary biopsy in response to ambiguous findings on an inappropriate imaging exam.
Surprisingly, nearly two-thirds of wasteful spending came from services that were less expensive that the median cost of the 44 services studied. In other words, a large number of inexpensive but low-value services constituted the bulk of wasteful spending. This unintuitive result was produced because inexpensive services were delivered 13 times more frequently than services costing more than the median price. In particular, preoperative lab testing for low-risk patients, despite being relatively cheap, represented almost half of all wasted spending due to its massive volume.
These findings suggest that a steady-dripping faucet of cheap yet useless healthcare services may be the primarily driver of wasteful spending, instead of extravagant items that have previously captured the public’s attention. This possibility opens up a promising new target for policymakers, as these services should hopefully have fewer entrenched financial stakeholders resisting change. However, taking advantage of this opportunity requires changing the practice patterns of myriad clinicians on a vast scale which will be a formidable challenge.
Abstract
An analysis of data for 2014 about forty-four low-value health services in the Virginia All Payer Claims Database revealed more than $586 million in unnecessary costs. Among these low-value services, those that were low and very low cost ($538 or less per service) were delivered far more frequently than services that were high and very high cost ($539 or more). The combined costs of the former group were nearly twice those of the latter (65 percent versus 35 percent).
PMID: 28971913
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