4 ways to reduce healthcare costs

Dr. Saul Weinreb, The Hill
February 10, 2018


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Despite paying twice as much per person in total healthcare costs as other modern economies, the United States experiences no better outcomes as a result. In the meantime, lawmakers continue to fight over who should pick up this ever-increasing tab, instead of focusing on how to reduce it in the first place.

Here are four potential ways to reduce the national healthcare costs. If even one of these strategies is employed, it could save billions annual for Americans.

1. Stop practicing defensive medicine

The biggest cost savings could be realized if we eliminated the practice of defensive medicine whereby physicians order medically unnecessary tests, procedures, and medications due to fear of malpractice lawsuits. This is estimated to cost the U.S. economy $700 billion annually.

A study found that over one in four health care dollars are spent on the practice of defensive medicine, a Gallup study found. Defensive medicine doesn’t make physicians practice better medicine — it simply makes them practice more expensive medicine. A whopping 96 percent of U.S. orthopedic surgeons admitted to practicing defensive medicine in 2012, creating $2 billion a year in unnecessary costs, according to research conducted by the Vanderbilt University Medical Center.

2. Reduce unnecessary paperwork

The prior authorization approval process costs over $80,000 per year, per practice, according to a New York-based study. If we estimate that there are 230,187 practices in the USA then the cost is $18.4 billion dollars per year (or $18,414,960,000). According to a 2009 study, the national price tag for all this time wasted is between $23 billion to $31 billion each year.

If U.S. health care administrative overhead were more like Canada’s, we could save almost $27.6 billion in annual health spending, according to a study published in Health Affairs.

3. Switch from disposable to reusable instruments

The U.S. is also wasting billions of health care dollars on disposable tools, even though sterilized, reusable tools work just as well and at considerable savings. It was calculated that the instrument cost per procedure of a full disposable set is between seven to 27.7 times higher than the cost of the same procedure with reusables, a study found. Given that there were 48 million surgical inpatient procedures performed in the U.S. in 2009, a simple switch to reusable tools would save an incalculable sum.

In a study of laparoscopic procedures conducted in Greece, reusable tools paid for themselves after only nine procedures and created a total savings of €305,270 ($422,000) over the two year period of the study; whereas disposable “instruments cost nine times more than reusable ones,” another study found.

4. Better management of surgical supplies

Forty-eight billion dollars per year could be axed if operating rooms cut down on surgical waste. Unused medical supplies eat up 13 percent of total surgical supply costs, or approximately $968 of waste per case, according to a University of California–San Francisco (UCSF) study that found $242,968 in operating room waste per month.

“Nearly $1,000 per procedure is being wasted” wrote Dr. Michael Lawton in the study. Extrapolated across the 48 million surgical inpatient procedures performed in the U.S. in 2009, eliminating this waste would result in savings of approximately $48 billion.

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