Reuters has a report of analysis done by an arm of their parent company, Thompson Reuters, discussing problematic wasteful medical spending in the U.S.
WASHINGTON (Reuters) – The U.S. healthcare system is just as wasteful assays it is, and proposed reforms could be paid for by fixing some of the most obvious inefficiencies, preventing mistakes and fighting fraud, according to a report released on Monday.
The U.S. healthcare system wastes between $505 billion and $850 billion every year, the report from Robert Kelley, vice president of healthcare analytics at Thomson Reuters, found.
"America's healthcare system is indeed hemorrhaging billions of dollars, and the opportunities to slow the fiscal bleeding are substantial," the report reads.
"The bad news is that an estimated $700 billion is wasted annually. That's one-third of the nation's healthcare bill," Kelley said in a statement.
"The good news is that by attacking waste we can reduce healthcare costs without adversely affecting the quality of care or access to care."
First, let's look at what the opening paragraph says, which is that if these dollars could be saved it would help pay for Mr. Obama's reform. What it doesn't say is that if ObamaCare passes then these wasted dollars could be saved and would pay for the reform. Let's see if any of the money can be saved, if so how, and whether the proposed health reform would have anything to do with such savings.
* Unnecessary care such as the overuse of antibiotics and lab tests to protect against malpractice exposure makes up 37 percent of healthcare waste or $200 to $300 billion a year.
Well, there is absolutely no attempt being made to fix this in ObamaCare. There is no tort reform being considered, let alone proposed. The "unnecessary" use of antibiotics can be read as a separate issue in the phrasing above, but is really part of the same defensive medicine. So let's subtract $250B from our hypothetical $750B, leaving us with $500B in potential savings. Looks a lot less than before, doesn't it?
* Fraud makes up 22 percent of healthcare waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams.
If we could eliminate Medicare fraud we should already have done so, with or without health care reform. Passing a reform bill on the premise that such reform will make fraud easier to nail is more wishful thinking. But let's say they'll pick up 25% of this through , being generous. So we'll subtract $150B, and now we've got only $350B, of which $50B is likely to be saved. Now it's even less impressive.
* Administrative inefficiency and redundant paperwork account for 18 percent of healthcare waste.
I've done Medicare and Medicaid paperwork, and it is equally or more inefficient. The one benefit that these government programs have is that they generally don't do reviews for medical necessity for the surgery I perform, unlike the private insurers. But I'm sure that will change - how do you think they're going to pick up that $50B of fraud? Right, more paperwork. No credit.
* Medical mistakes account for $50 billion to $100 billion in unnecessary spending each year, or 11 percent of the total.
And you think passing a reform bill will eliminate medical mistakes? Uh, no. These can improve, obviously, but never be eliminated, and such improvements can be obtained without a comprehensive reform. No credit here, either.
* Preventable conditions such ascost $30 billion to $50 billion a year.
This is slick wording. The operative word is "uncontrolled." Diabetes is not preventable*, but poor control of diabetes can be improved. Again, though this is something that can be and is being done gradually absent reform. But recall that preventative medicine doesn't necessarily save money, as the interventions of prevention often cost as much as the treatment of the preventable outcome.
Our findings suggest that the broad generalizations made by many presidential candidates can be misleading. These statements convey the message that substantial resources can be saved through prevention. Although some preventive measures do save money, the vast majority reviewed in the health economics literature do not.
Continuing, and taking the next two together.
"The average U.S. hospital spends one-quarter of its budget on billing and administration, nearly twice the average in Canada," reads the report, citing dozens of other research papers.
"American physicians spend nearly eight hours per week on paperwork and employ 1.66 clerical workers per doctor, far more than in Canada," it says, quoting a 2003 New England Journal of Medicine paper by Harvard University researcher Dr. Steffie Woolhandler.
Well, Canada is single-payer, government run. You're not suggesting that the Obama Administration is lying, that they really intend to get us to a single-payer system, and that private insurance will eventually be eliminated, are you? If the answer is no, then we're comparing apples and oranges here. And if the answer is yes, then we've got a lot more to talk about before accepting any reform bill. Interestingly, Dr. Woolhandler is a member of Physicians for a National Health Program, a single-payer advocacy group.
So of the original $750B in potential "savings" that might be gleaned, it would seem that about $50B is the best that ObamaCare can hope to recover. The rest is either not under consideration (tort reform for defensive medicine), could be done without ObamaCare (Medicare/Medicaid fraud), or would only accrue in a single-payer system that also had tort reform (documentation and paperwork improvements). In other words, the $800B number is a fantasy, wishful thinking used to push the agenda.
You might as well have sighted a unicorn.
*other than to the extent that obesity contributes to the adult-onset variety.