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September 7, 2012

IOM: 30% of health spending was waste

Daily Briefing

    About 30% of health spending in 2009, or roughly $750 billion, was wasted on unnecessary services, according to a report released Thursday by the Institute of Medicine (IOM).

    In the 382-page report, an 18-member panel of experts identified challenges facing the health care system and provided recommendations for improvement.

    During a live Webcast of the IOM report release on Thursday, Mark Smith—CEO of the California HealthCare Foundation and chair of the committee—said the U.S. health care system's two main challenges are cost and complexity.

    The report linked wasted spending to unnecessary services, excessive administrative costs, fraud, and other problems. In addition, about 75,000 patient deaths could have been prevented in 2005 if every state had delivered health care at the quality level of the best-performing state, according to one estimate.

    Report recommendations

    The report concluded, "The traditional systems for transmitting new knowledge—the ways clinicians are educated, deployed, rewarded, and updated—can no longer keep pace with scientific advances. If unaddressed, the current shortfalls in the performance of the nation's healthcare system will deepen on both quality and cost dimensions, challenging the well-being of Americans now and potentially far into the future."

    The report offered the following 10 recommendations for improving the U.S. health care system, including:

    • Digital Infrastructure: "Improve the capacity to capture clinical, care delivery process and financial data for better care, system improvement and the generation of new knowledge."
    • Data Utility: "Streamline and revise research regulations to improve care, promote the capture of clinical data and generate knowledge."
    • Clinical Decision Support: "Accelerate integration of the best clinical knowledge into care decision."
    • Patient-Centered Care: "Involve patients and families in decisions regarding health and health care, tailored to fit their preferences."
    • Community Links: "Promote community-clinical partnerships and services aimed at managing and improving health at the community level."
    • Care Continuity: "Improve care coordination and communication within and across organizations."
    • Optimized Operations: "Continuously improve health care operations to reduce waste, streamline care delivery and focus on activities that improve patient health."
    • Financial Incentives: "Structure payment to reward continuous learning and improvement in the provision of best care at lower cost."
    • Performance Transparency: "Increase transparency on health care system performance."
    • Broad Leadership: "Expand commitment to the goals of a continuously learning health care system."

    The panel calls for leveraging health IT to meet many of the goals outlined in the report. For example, the report noted that:

    • Mobile health technology and electronic health records can help capture and share health data; and
    • Health IT vendors can create tools to help patients communicate with their health care providers and manage their own health care.

    In the report, the panel urged the National Coordinator for Health IT, IT vendors, and standard-setting groups to ensure that health IT systems are robust and interoperable (McKinney, Modern Healthcare, 9/6 [subscription required]; McCann, Healthcare IT News, 9/6; IOM report, 9/6; Alonso-Zaldivar, AP/Austin American-Statesman, 9/6).

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