America's Health System Wasted $750 Billion In One Year

America's health care system is inefficient, suffers from data overload, is complex and very costly, a report from the Institute of Medicine (IoM) revealed today. The authors added that too many negative factors are undermining health care quality and affecting the USA's global competitiveness and economic stability. Despite all this, there are knowhow and tools in place to correct the deep faults within the country's health system so that costs may be reduced and the quality of care improved.

The authors of the report (the Committee) estimated that $750 billion was wasted nationwide on administration costs, fraud, pointless services, and some other problems. Apart from the economic toll these deficiencies place, they also result in patients having to suffer needlessly. Some studies have indicated that in 2005, about 75,000 deaths could have been averted if each state had delivered healthcare at the quality and efficiency levels of the best performing state.

The Committee said that aiming for just incremental upgrades and alterations carried out by individual hospitals or health care providers will have little impact on improving the nation's overall health care service.

America's health care needs to transform into a "learning system"

The only way the USA's healthcare system can really improve is to transform it into a learning system that continuously improves itself by "systematically capturing and broadly disseminating lessons from every care experience and new research discovery."

Health care authorities will need to embrace and implement new technologies that gather and analyze clinical data at the point of care, encouraging patients and their loved ones to become active contributors, and working towards total transparency and teamwork within health care organizations. Financial and other types of incentives which focus on quality and results should be placed into the system.

Committee chair Mark D. Smith, president and CEO, California HealthCare Foundation, Oakland, said:

"The threats to Americans' health and economic security are clear and compelling, and it's time to get all hands on deck. Our health care system lags in its ability to adapt, affordably meet patients' needs, and consistently achieve better outcomes. But we have the know-how and technology to make substantial improvement on costs and quality. Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value."

Keeping up with new treatments and breakthroughs

One of the main problems today is that healthcare providers cannot keep up with the rapid pace of new research discoveries and technological breakthroughs.

In an online communiqué, the IoM wrote "How health care organizations approach care delivery and how providers are paid for their services also often lead to inefficiencies and lower effectiveness and may hinder improvement."

The Committee said for a health system to be able to continuously evolve, excellent use of data is vital. In the USA, approximately 75 million people have two or more chronic conditions - for proper treatment and control, good coordination among multiple specialists and therapies is vital. Otherwise, the risk of misdiagnoses, clashing interventions, and dangerous drug interactions grows.

Doctors and patients often do not have useful and relevant data at the point of care where decisions are made. Currently, for new breakthroughs to become widely accepted and adopted can take several years. Only after 13 years did beta blockers become standard practice for heart attack victims.

Embracing mobile technologies and electronic health records would contribute considerably to a competent capture of health data, as well as disseminating that information. They wrote that "The National Coordinator for Health Information Technology, IT developers, and standard-setting organizations should ensure that these systems are robust and interoperable, the report says. Clinicians and care organizations should fully adopt these technologies, and patients should be encouraged to use tools, such as personal health information portals, to actively engage in their care."

During the last 40 years, health care costs have increased at a higher rate than inflation or the economy as a whole for 31 of them. The main thrust has been volume rather than quality as far as reimbursements are concerned, instead of paying a flat rate or rewarding providers according to patient outcomes, the authors added.

The report urges insurance providers, professional societies, researchers, and health economists to work together to find ways of measuring quality performance and to design new payment models and incentives that reward quality rather than volume.

So far, not many health care organizations, clinics or medical practices encourage patients and their families to become engaged in care decisions and management of their conditions, even though studies and examples abroad have proven that they lead to better outcomes and value for money.

The Committee wrote:

"To facilitate these interactions, health care organizations should embrace new tools to gather and assess patients' perspectives and use the information to improve delivery of care. Health care product developers should create tools that assist people in managing their health and communicating with their providers.

Increased transparency about the costs and outcomes of care also boosts opportunities to learn and improve and should be a hallmark of institutions' organizational cultures, the committee said. Linking providers' performance to patient outcomes and measuring performance against internal and external benchmarks allows organizations to enhance their quality and become better stewards of limited resources, the report says. In addition, managers should ensure that their institutions foster teamwork, staff empowerment, and open communication."