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Medicare Pays Billions for Wasteful Care

Cheryl Clark, for HealthLeaders Media, May 14, 2014

Developing a measure to define overuse was difficult, but researchers found a way to quantify 26 types of unnecessary medical procedures administered to Medicare beneficiaries and tallied the cost.

Two measures developed by Boston-area medical researchers to quantify the extent of needless care have been used to estimate that 25% to 42% of patients over age 65 received at least one low-value, potentially unnecessary healthcare service during the study period, and many received several.

The study examined just 26 types of procedures, such as stress testing for stable coronary disease, or CT imaging for patients with headache. Based on a sample of Medicare claims for 1.36 million beneficiaries in 2009, when extrapolated to all beneficiaries, the overuse of services unlikely to help represents between $1.9 billion and $8.5 billion in spending, or between $71 and $310 per patient for that year.

"Our bottom line is that our findings are consistent with the belief that overuse is extensive," says Aaron Schwartz, a medical student at Harvard Medical School's Department of Health Care Policy and lead author of the study. The report is published in the May 12th issue of JAMA Internal Medicine.

He emphasizes that "the overspending we find here is likely the tip of the iceberg, because we're only looking at such a narrow set of these 26 services, and we know there are hundreds more low-value services out there."

Schwartz says that the study is the first to quantify the extent to which Medicare beneficiaries receive a wide variety of unnecessary procedures. Prior studies have examined only one or two types of services, such as surgery for back pain.

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2 comments on "Medicare Pays Billions for Wasteful Care"


@cascadia Sherry Reynolds (5/17/2014 at 2:36 PM)
Why in the world do we expect patients to have more information about which tests are needed than a doctor does? The average literacy rate in the US is 8th grade and medical literacy is the 5th grade. Even in the study the majority of the tests were in fact appropriate so we are going to ask seniors and the most vulnerable part of our population to suddenly question their doctors orders and or shift the cost of this service onto them? If doctors are unable to determine the appropriate use how can a patient get up to speed on when to order these tests? The over focus on a consumer model has very clear unintended consequences and in no other industrialized country is this the model they use to get better outcomes at lower costs.

Jeff (5/16/2014 at 4:03 PM)
Low value is in the eye of the beholder often times. Example: therapy digs for emotional support. Not very cost effective if you apply sane rules as have on these things like ct for headache in ER. But guess what, it provides relief of mental anxiety which is disease. Who is going to not order ct on headache when lawyers ready to sue for first one out of a thousand missed? Naive reporting....just like negative appendectomies... Supposed to let peopke get septic and die because cant have a neg appendectomy? Easy in retrospect to condemn doctors who order screening tests to alleviate suffering whether its mental or physical and to prevent lawsuits. Its not a doctoring problem. Its called risk/reward and cost benefit ratio. I can quit ordering all lab... Most of time its negative, so guess labs are low value. Broad studies like these are disgustingly intellectually naive.