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Attacking Waste and Mismanagement in Health Care

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Did you know that the quality of health care can actually increase with a decrease in cost?  In an article in today’s Boston Globe entitled “In Health Care, Cheaper Can Mean Better” by Dr. Donald M. Berwick, it was fascinating to read the discussion concerning Massachusetts health care.  Recently, Dr. Berwick and a colleague Andy Hackbarth published a study in the Journal of the American Medical Association which found that between 21 and 47% of costs in MA health are wasted, and the average is a whopping 34%.  Berwick gave an example of such waste: prescribing an anti-biotic for a viral infection, such as the common cold.  Another issue is lack of coordination; apparently, insurance does not pay to coordinate health care.  The authors’ belief is that the current system of fee for service without any payment for outcome encourages hospitals to keep beds full and discourages coordinating treatment which would reduce the need for hospitalization and allow for more empty hospital beds.  According to data from the Organization for Economic Cooperation and Development (OECD), the United States spends an estimated $2 trillion annually on healthcare expenses, more than any other industrialized country. Lowering waste would save the US $600 billion annually, which is 1/3 of the US deficit.  So waste in healthcare is a major issue and the government should be attempting to reduce this waste.  The irony, as proven by Berwick and Hackbarth, is that this reduction would come with a significant increase in public well being.

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