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Medicare Pays Billions for Wasteful Care

Cheryl Clark, for HealthLeaders Media, May 14, 2014

Regionalization Matters
Two key findings from the report involve regionalization of low-value care.

The first, Schwartz says, is that regionally, providers seem to be somewhat consistent in how much low-value care they deliver to Medicare beneficiaries. "Groups of providers who tend to provide high levels of one type of low-value service also tend to supply high levels of other types of low-value services," he says.

The second is that the difference between regions that spent the least—less than 95% of everyone else—spent $227 per beneficiary, which was not that much lower than the regions that were spending the most, $416 per beneficiary. "We saw a lot of dollars even in that low-spending group, indicating a substantial amount of overuse even in the regions with the lowest amount of overuse."

Developing a measure to define overuse was extremely difficult for the researchers because the federal claims database does not contain the reasons why patients were told to undergo the low-value services. For example, an incorrectly or poorly coded Medicare claim for a screening test might not accurately identify a patient as a high risk candidate for repeated follow-up screenings, Schwartz explains.

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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.