Finding the Waste in Our Health Care System – Low-Hanging Fruit

Too often, those who oppose health care reform say that while there may well be waste in our health care system, it’s hard to say where it is. One man’s waste is another man’s effective treatment. Many tests and surgeries may be controversial, but who is to say for sure what is unnecessary?

The truth is that we have stacks of medical evidence showing that many procedures and products are of little or no value to many patients who receive them.  These treatments may be useful to patients who fit a particular medical profile: women between the ages of 50 and 70, for instance, or patients suffering from left main coronary artery disease. In these cases, health care reformers agree: patients should receive the treatment. 

But typically a much larger group of patients are subjected to a procedure that provides no benefit. Thus, they are subjected to risk without gain. Keep in mind that one hundred thousand people die each year from complications of surgery—far more than die in car crashes. And some of those surgeries were unnecessary.

In a recent post on The Health Care Blog (THCB) (  Dr. George Lundberg, former editor-in-chief of the Journal of the American Medical Association,  wrote about seven areas where we have enough comparative effectiveness research to know that a great many patients are being over-treated. Lundberg, who is now president and chair of The Lundberg Institute suggests that we could begin to rein in health care spending NOW –if doctors  take “a good hard look” at the evidence (and “in the mirror”), and share medical evidence with patients about benefits and risks when discussing options for treatment. (For more on “Shared Decision-Making” see this Health Beat post)

Below, an excerpt from Lundberg’s essay on THCB:  “How to Rein in Health Care Costs, Right Now.”  At several points, I’ve provided links to articles that discuss medical evidence on the use and over-use of specific tests and procedures in greater detail — Maggie Mahar
Lundberg writes:

I believe that there are still many ethical and professional American physicians and many intelligent American patients who are capable of, in an alliance of patients and physicians, doing "the right things". Their combined clout is being underestimated in the current healthcare reform debate. . . .

Physician decisions drive the majority of expenditures in the US health care system. American health care costs will never be controlled until most physicians are no longer paid fees for specific services. The lure of economic incentives to provide unnecessary or unproven care, or even that known to be ineffective, drives many physicians to make the lucrative choice. Hospitals and especially academic medical centers are also motivated to profit from many expensive procedures. Alternative payment forms used in integrated multispecialty delivery systems such as those at Geisinger, Mayo, and Kaiser Permanente are far more efficient and effective.
Fee-for-service incentives are a key reason why at least 30% of the $2.5 trillion expended annually for American health care is unnecessary. Eliminating that waste could save $750 billion annually with no harm to patient outcomes.
So, what can we in the USA do RIGHT NOW to begin to cut health care costs?

An alliance of informed patients and physicians can widely apply recently learned comparative effectiveness science to big ticket items, saving vast sums while improving quality of care.

    Intensive medical therapy should be substituted for coronary artery bypass grafting (currently around 500,000 procedures annually) for many patients with established coronary artery disease, saving many billions of dollars annually.

    The same for invasive angioplasty and stenting (currently around 1,000,000 procedures per year) saving tens of billions of dollars annually. [See this post from the Mayo Clinic pointing to research that focuses on patients with chronic stable angina, and compares getting an angioplasty and stent to taking medications and making lifestyle changes.]

    Most non-indicated PSA screening for prostate cancer should be stopped. Radical surgery as the usual treatment for most prostate cancers should cease since it causes more harm than good. Billions saved here.   [See HealthBeat posts herehere; and here)

    Screening mammography in women under 50 who have no clinical indication should be stopped and for those over 50 sharply curtailed, since it now seems to lead to at least as much harm as good. More billions saved. [For a full discussion of mammograms, see this HealthBeat post as well as references to medical journal articles included that post:]    

    CAT scans and MRIs are impressive art forms and can be useful clinically. However, their use is unnecessary much of the time to guide correct therapeutic decisions. Such expensive diagnostic tests should not be paid for on a case by case basis but grouped along with other diagnostic tests, by some capitated or packaged method that is use-neutral. More billions saved.  [See the section on “medical imaging” along with references to studies in medical journals  in this article from The Campaign for American Progress, and this article by Dartmouth researchers on the “epidemic of diagnosis”]

    We must stop paying huge sums to clinical oncologists and their institutions for administering chemotherapeutic false hope, along with real suffering from adverse effects, to patients with widespread metastatic cancer. More billions saved.
{See “A Very Candid Letter From an Oncologist” on HealthBeat ]

    Death, which comes to us all, should be as dignified and as free from pain and suffering as possible. We should stop paying physicians and institutions to prolong dying with false hope, bravado, and intensive therapy which only adds to their profit margin. Such behavior is almost unthinkable and yet is commonplace. More billions saved.  [See “Pain and Palliative Care,” profiling palliative care pioneer Dr. Diane Meier on HealthBeat ]

 Lundberg ends his post by asking:
Why might many physicians, their patients and their institutions suddenly now change these established behaviors? Patriotism, recognition of new science, stewardship, and the economic survival of the America we love. No legislation is necessary to effect these huge savings. Physicians, patients, and their institutions need only take a good hard look in the mirror and then follow the medical science that most benefits patients and the public health at lowest cost. Academic medical centers should take the lead, rather than continuing to teach new doctors to "take the money and run".
Physicians can re-affirm their professionalism and patients their rights, with sound ethical behavior . . . . The interests of the patients and the public must again supersede the self interest of the learned professional.”
Let me add that in at least ten U.S. communities, doctors and hospitals already  have come together to show that, by  collaborating, and ignoring fee-for-service incentives, they can in fact, reduce the volume of unnecessary tests and procedures, lowering the cost of healthcare, while enhancing quality. See this HeathBeat post.

While some providers and patients make progress at the grassroots level, in Washington, the Obama administration has funded

12 thoughts on “Finding the Waste in Our Health Care System – Low-Hanging Fruit

  1. I have already commented on how naive Dr. Lundberg is with respect to Mammography. Until the recommendations of the AMA, American Cancer Society, HHS (The US Government), etc. change, any physician who does not follow the current recommendations (which recommend screening below age 50) is taking a large medico-legal risk. This is a classic example of the costs associated with defensive medicine.
    I am also intrigued by his rather vague statement:
    “Such expensive diagnostic tests should not be paid for on a case by case basis but grouped along with other diagnostic tests, by some capitated or packaged method that is use-neutral.”
    I think I know exactly what he means.
    This is not a new idea, but an old idea that was put to the test during the 90’s by HMO’s. Basically, physicians were “dinged” financially if they ordered “too many” tests. This certainly works to decrease the number of “unnecessary tests”, however it also works to decrease the number of necessary tests.
    If I was a malpractice lawyer, I would be salivating – taking a case to a jury where a doc didn’t order a test and by doing so increased his bonus is like shooting fish in a barrel.
    By the way, I do agree that too many diagnostic tests are ordered and have posted specifics here on this blog. Lundberg’s way – creating financial incentives for not ordering/performing tests recreates the familiar incentives of the HMOs of the 90s – docs are pressured monetarily to reduce their use of certain tests while not being protected against the legal downside of those decisions.
    Another interesting tidbit I came across – Kathleen Sebelius served as executive director and chief lobbyist for the Kansas Trial Lawyers Association (now Kansas Association for Justice) from 1977-1986. What’s that old saying about the fox and the henhouse?

  2. What Lundberg is advocating is not ignoring the recommendations but CHANGING them to reflect more current knowledge. Stop using malpractice as an all-purpose excuse for irrational but profitable behavior.

  3. Fee for services adds up fast. About four years ago my wife developed a urinary tract infection that became noticeable one Sunday morning in late July. The pain was intense so a trip to the emergency room seemed in order. Three hours and several tests later we walked out of the hospital pain free and 1,600 or so dollars poorer. We don’t have medical insurance so made payments.
    It seems to me like the cost of diagnoses was all out of proportion to the problem being diagnosed but what do I know?

  4. In 1993, I implored the Clinton team to visit any of several national ‘educational conferences’ to observe first-hand the volume and diversity of products and services displayed on the Exbhibit Floors. The breadth and scope of the healthcare industry is so vast and complex … and most public policy-makers fail to make the connection between the market and the incentives for excessive utilization.
    The insatiable appetite for new devices, technologies, medications, etc. ad infinitum, which are not necessarily better for patients than existing products,is an enormous cost-driver aka opportunities for providers to make more money. Providers are often drawn to these products having been induced by manufacturers and distributors with immediate rewards.
    Medicare programs learned decades ago that physician-owned out-patient clinical lab and diagnostic imaging facilities were doing as much as 300% more diagnostic tests on Seniors than other facilities with no financial interests by the prescribing physicians.
    In spite of these facts, it is ‘politically incorrect’ for politicians to cite such specifics. Instead, they opt for talking in ambiguous terms about fraud, waste, and abuse … and the general public has no idea what the hell they mean.
    Medical outcomes have become largely irrelevant. Maximizing reimbursement, legaly or otherwise, is at center stage for many providers. Unnecessary tonsillectomies and hysterectomies were rampant 20 years ago. One diagnostic imaging equipment manufacturer contacted us years ago to help them sell CT Scanners and MRIs to primary care physician practices. It was all about selling the equipment and persuading doctors that they could enhance their practice revenues.
    There isn’t a week that goes by (for the past 20 years) that some entrepreneur contacts our firm to help them sell a product or service with our clients. Most of these pitches allege maximizing our clients’ revenue. The corruption is evident when they offer us an incentive to convince our clients to make the buy.
    We routinely reject the overtures. Other firms may have been less ethically conflicted by the propositions.
    Absent more aggressive federal oversight of these business practices, cost containment will be a pipe dream.

  5. These are interesting recommendations. I have not done literature searches on these issues (they are not directly relevant to my practice) and so I can’t comment on their merit, but Lundberg seems to be a respectable guy. The CAD recommendations seem reasonable. Do we have guidelines, from trusted sources on these topics?

  6. Marc,
    I presume your response was directed to me.
    “What Lundberg is advocating is not ignoring the recommendations but CHANGING them to reflect more current knowledge. Stop using malpractice as an all-purpose excuse for irrational but profitable behavior.”
    I would like to point out that the post was about what we could do NOW to cut costs. You will (presumably) agree with me that a physician in practice needs to be mindful of the CURRENT recommendations. If and when they are CHANGED
    physicians will be able to follow the new recommendations. Until then, Lundberg’s recommendations and $3.50 will get you a tall, skinny, decaf latte.
    To make an analogy that may help you understand the situation better; there have been calls from many “experts” for the decriminalization of marijuana (I have no strong feeling one way or another). But if the law in your state has not been changed, the police that arrest you for possession and the judge who sentences you are not going to be impressed by an “experts” recommendation.

  7. David,
    You say:
    “Fee for services adds up fast. About four years ago my wife developed a urinary tract infection that became noticeable one Sunday morning in late July. The pain was intense so a trip to the emergency room seemed in order. Three hours and several tests later we walked out of the hospital pain free and $1,600 or so dollars poorer. We don’t have medical insurance so made payments.”
    I see what you describe on a regular basis (I read X-Rays, CTs, etc from 7 ER at night)- there are a lot of expensive tests ordered that have a low probability of being positive. This problem is getting worse, not better.
    In the “old days” your wife would probably have gotten a urinalysis and a prescription for antibiotics. Nowadays, she probably had a CT and a bunch of blood work.
    Believe it or not, the underlying motive for these extra tests is NOT greed since the ER docs who order the tests don’t get a “cut” from what they order (at least as far as I know). On a regular basis, I speak to ER docs who admit that they order a lot of CYA (cover your ass) tests. This behavior could be changed if two things happened;
    1) We had good protocols for docs to follow
    2) Docs who followed them were protected from malpractice.
    For the latter to happen, we will need to wait for the next Republican Congress and President.
    (I am a Democrat who voted for Obama.)

  8. I would like to add another item to Dr. Lundberg’s list of easy to do right now solutions ( that will fly just as well as his pigs). Prevent, outlaw, bar whatever you want to call it, private independent practitioners from following their patients in hospitals. We have seen that hospitals who have only salaried physicians have much better outcomes with significant savings. Someone asked, “who should be making the decisions of medical necessity?’ My reply: it definitely should NOT be someone who is financially compromised one way or the other.

  9. It seems undeniable that excessive healthcare costs reflect, to a large measure, duplicate or unnecessary facilities, equipment, tests, procedures, and specialty referrals driven by a fee for service paradigm that encourages excess.
    That’s where we are now, and where we need to be is in a system with fewer hospitals and empty beds, fewer MRI machines, fewer lab tests, and so on. A vexing challenge, as I see it, however, is how to go from here to there.
    How do we close hospitals, dramatically trim the number of specialists, eliminate laboratories (or at least half of their equipment and technicians), and concomitantly reduce the support staff that accompany all these excesses, without (figuratively) sending many thousands of individuals onto the unemployment rolls, as well as inviting an enormous backlash?
    My question is not rhetorical. I believe it must be done, but the mechanism will probably be not only enormously complex and subject to erroneous choices (eliminating the good rather than the bad), but also very long term in its execution – perhaps decades to the extent we have to eliminate many excesses by attrition.
    It is one thing to announce that comparative effectiveness research has demonstrated no benefit for a set of expensive surgical procedures, but something else to squeeze a local hospital to eliminate half its surgical suites, fire half the surgical nurses, halve the number of gloves ordered per month and the number of pre-op EKGs, and have this scenario play itself out on a national level without enormous grief and resistance.
    I expect there is no easy way to do this, but what mechanisms would be most capable to getting the job done while minimizing the consequences to those displaced in the process?

  10. dcm,
    You say: “Prevent, outlaw, bar whatever you want to call it, private independent practitioners from following their patients in hospitals. We have seen that hospitals who have only salaried physicians have much better outcomes with significant savings.”
    I presume you are not referring to surgical specialties, but rather to internal medicine, neurology, pediatrics, etc.
    In fact, things are headed in this direction anyway, but for other reasons. The number of “Hospitalists” is expanding at a fairly rapid rate. Most Internists and Family Practitioners are financially better off NOT going to the hospital because of the number of office appointments they need to cancel to create the time to go to the hospital, see a few patients, and return.
    In addition, in return for having hospital privileges, docs are generally forced to take ER call. Although this may be attractive early in a physicians practice to build a patient base, a physician with an established patient base generally doesn’t want to take ER call – too many uninsured “train wrecks” come through the ER.

  11. The financial motive is so misunderstood by the self-styled reformers. No pediatrician is getting rich taking out tonsils. Plenty of reformers have gotten rich designing DRG systems, relative value systems and the rest of it.
    No ER doctor gets an extra dime by ordering a $50,000 workup.
    Defensive medicine does not make money for the initiating doctor. It is done to protect the initiating doctor.
    Defensive medicine is so ingrained in our system, and our system’s influence is so great around the world, it has infected the systems around the world, including the ones some of us would like to ape.
    Other countries look to us to know how to diagnose pulmonary embolis, not realizing our standard of care is determined by retired postal workers sitting on juries, not by doctors or literature.
    Even if we are money driven, how does salary end the perverse incentive problem? The scans do make money for the hospital (and the Radiologist, but comparitively a pitance) so, if medical care is so money driven why wouldn’t the hospitals reward their employee doctors for ordering superfluous scans?
    The primary aims of reform, divorcing insurance from employment, equalizing tax treatment of insurance, rationalizing pre-existing conditions, making medical pricing more competative, ending insurance mandates, allowing the standard of care to be reduced so medical care can be more affordable, and ending Queen for a day justice have all been forgone.
    We don’t know what the proper level of treatment or testing is. We will never find out without the ability to DO LESS, which can’t be done without ironclad tort reform.
    In what sense is what is left reform at all?