Low-Value Services Cost Medicare Billions

Emerging health models all focus on 2 things in transforming care delivery: quality and cost-effectiveness. In order to achieve those standards, providers must adopt practices which support value, and cut those services or procedures that don’t.

These notions are also evident in a recent study from Harvard Medical School Department of Health Care Policy. Researchers found that there were nearly 22 million cases of low-value treatments being administered to Medicare beneficiaries during 2009.

“There are hundreds of other low-value services,” said J. Michael McWilliams, MD, PhD, Harvard professor and one of the study’s authors. “We suspect this is just the tip of the iceberg.”

An analysis of 26 different procedures from lists including those from the Choosing Wisely program found that 42% of Medicare patients received at least 1 low-value service during 2009, which cost Medicare a total of $8.5 billion. The authors noted that in all likelihood, these aren’t the only low-value procedures and services driving Medicare spending.

“We were surprised that these wasteful services were so prevalent,” said lead author Aaron Schwartz, MD, PhD. “Even just looking at a fraction of wasteful services and using our narrowest definitions of waste, we found that one-quarter of Medicare beneficiaries undergo procedures or tests that don't tend to help them get better.”

The study findings are not concrete. Researchers noted that value can vary depending on a given patient. While screening or lower back imaging may be useful for patients diagnosed with cancer, it would provide little benefit to patients with muscle soreness.

“Because the value of a service depends on the patient, it is challenging to devise payment and coverage policies that limit wasteful care but not valuable care. Some tests and treatments that are wasteful across the board are easy targets—we can stop paying for them. But for most services, incentives that allow providers greater discretion at the point of care may be needed to cut significant amounts of waste while minimizing unintended consequences,” added Dr McWilliams.

The findings indicate the important of reducing unnecessary procedures and services.

Around the Web

Harvard: Overused Medical Services Cost Medicare Billions [Kaiser Health News]

Wasteful Medicare Spending Topped $1.9 Billion in 1 Year: Study [Philly.com]