Health Insurance Articles
How Wasteful Is The Current Health Care System
2009-12-29
With ongoing talk about our nation's health care system, people are constantly questioning how wasteful the system actually is. Currently, estimates vary for the amount being wasted through the U.S. healthcare system. These estimates range from $800 billion to over $1.2 trillion. This amounts to roughly one third of the nation's health care bill, or $2,600 dollars per citizen of the U.S. annually. Even if the amount is on the lower end of the spectrum, Americans are still throwing away large amounts that could be diverted towards much more important funding. Large amounts of waste also results in higher health insurance costs - as health care insurance companies are forced to make up for lost revenue. A report published by Thomson Reuters stated that "America's healthcare system is indeed hemorrhaging billions of dollars, and the opportunities to slow the fiscal bleeding are substantial." The good news is that a large portion of the waste can be eliminated without adversely affecting the health care system.
Two of the biggest money wasters are duplicate care and inefficient administration. Together, these issues make up 37 percent of healthcare waste, or around $300 billion a year. Duplicate care is largely a result of the current health care system's paper-based records system. This system discourages an exchange of medical records, and caregivers often prescribe tests that have already been performed or initiate treatment that may have already been proven ineffective. According to Thomson Reuter's report, One quarter of U.S. hospitals budgets are spent on billing and administration, which is nearly twice the amount of similar Canadian hospitals. Malpractice suits are another reason that such a high amount of money is wasted in the current U.S. health care system. Doctors who are worried about malpractice prescribe extra antibiotics or treatments in order to ensure that they have covered all possible issues that the patient may face, even if these treatments are unnecessary.
Another issue is that the American health care system does not put a strong focus on preventative care. Diabetes is often cited as an example. Uncontrolled diabetes is very expensive to treat, while maintaining a healthy body with diabetes requires only a minimal amount of learning and expense. While increasing awareness of poor health choices is not entirely within the health care system's hands, more emphasis can be placed on educating citizens in order to promote a healthy lifestyle.
Despite having one of the largest percentages spent on healthcare, America has an unhealthier population with more cases of diabetes, obesity and heart disease than any other developed nation. Despite this, small changes to the health care system, as well as steps taken by individuals to be healthy, will result in a drastic reduction in health care waste.
