Home Commentary One person’s trash is another one’s gold

One person’s trash is another one’s gold

March 2010

Published in the March 2010 issue of Today’s Hospitalist

Thomson Reuters, a think tank that bills itself as the “world’s leading source of intelligent information for businesses and professionals,” recently concluded that U. S. health care wastes between $600 and $800 billion each year.

My first thought was, “One person’s trash is another person’s gold.” My second: “Only $800 billion?” This staggering sum equals roughly one-third of the $2.2 trillion we spend annually on health care.

To put this figure into perspective, let me break it down into numbers that hospitalists can relate to. Let’s assume that hospitalists could reduce this waste by 25%; after all, we sell ourselves as the efficiency doctors.

We would thereby save the system $200 billion. In return, let’s assume we were rewarded a mere 25% of what we saved. Suppose it takes 40,000 hospitalists to achieve said savings.

Here is where the “ah-ha” moment occurs. Each of us would make $5 million a year, roughly 20% of the take-home pay for New York Yankees third baseman Alex Rodriguez. While I am painfully aware that we number only 30,000 hospitalists, something tells me that under this scenario, our recruiting struggles would be over.

The toll of defensive medicine
But before we consider this cash in the bank, let’s look at where Reuters claimed the waste was coming from and how we, as hospitalists, can eliminate it.

I quote: “Unnecessary Care (40% of healthcare waste): Unwarranted treatment, such as the over-use of antibiotics and the use of diagnostic lab tests to protect against malpractice exposure, accounts for $250 billion to $325 billion in annual healthcare spending.”

Last fall, by comparison, the Congressional Budget Office reported that defensive medicine reform would save health care only $11 billion a year, or 0.05% of total health care costs.

While costs of unwarranted treatment and savings due to potential liability reform are not exactly an apples-to-apples comparison, I have more faith in the Reuters numbers. Fear of malpractice permeates almost every aspect of health care, and real tort reform would make a difference.

If done right, patients would clearly benefit in terms of more affordable health care and appropriate compensation for true medical negligence. Obviously, hospitalists won’t be able to claim responsibility for tort reform, should it occur. But practicing in a reformed litigation environment would be more than enough reward.

“CSI: Hospitalist SMFU”
Reuters again: “Fraud (19% of healthcare waste): Healthcare fraud costs $125 billion to $175 billion each year, manifesting itself in everything from fraudulent Medicare claims to kickbacks for referrals for unnecessary services.”

These are staggering figures, even in the era of Bernie Madoff’s $65 billion Ponzi scheme. How hard can it be to track down the people who are taking all of us for a ride? Should the government need help finding them “and if the SEC’s bang-up job of catching Mr. Madoff is any indication, it does “they should start deputizing hospitalists now.

Given the fact that most of us work week-on/week-off, understand what constitutes health care fraud and have watched more than a few episodes of “CSI,” moonlighting for the Feds seems like a natural fit. Maybe our involvement could even lead to a new reality show spin-off: “CSI: Hospitalist SMFU (Special Medicare Fraud Unit).” I’m sure many of us would be more than willing to go after the bad guys (every other week).

“Administrative Inefficiency (17% of healthcare waste): The large volume of redundant paperwork in the U.S healthcare system accounts for $100 billion to $150 billion in spending annually.” Admittedly, this is a tough problem to tackle. However, information technology at least holds out some promise to minimize this redundancy. And hospitalists are one of the few medical specialties seemingly ready to embrace the IT revolution that, finally, appears to be ready for prime time.

Errors and prevention
“Healthcare Provider Errors (12% of healthcare waste): Medical mistakes account for $75 billion to $100 billion in unnecessary spending each year.”

To err is human. However, I believe most hospitalists are on board with a reasoned approach to never events and payment linked to quality. With Robert Wachter, MD, and SHM leading the charge, we are making a name for ourselves as the group that pays more than lip service to physician accountability.

“Preventable Conditions (6% of healthcare waste): Approximately $25 billion to $50 billion is spent annually on hospitalizations to address conditions such as uncontrolled diabetes, which are much less costly to treat when individuals receive timely access to outpatient care.”

Noble concept, but consider this money spent. While improving access to care will go a long way to improving the country’s health, the concept of leading a horse to water and actually making him drink comes into play. Even if we can’t save this $50 billion, hospitalists are “all in” on projects that may make a dent in the difficult “bounceback” patient, which largely defines this patient population.

Care coordination: We own it
“Lack of Care Coordination (6% of healthcare waste): Inefficient communication between providers, including lack of access to medical records when specialists intervene, leads to duplication of tests and inappropriate treatments that cost $25 billion to $50 billion annually.”

This one belongs to us. Our field’s ascendancy is primarily based on the idea that we improve care coordination.

Even if we redo the numbers and look only at care coordination: $50 billion divided among 40,000 hospitalists, assuming we keep 25% of what we save the government and private insurers. That comes to $313,000 a year “each. I’ll still take it. And remember, we can still moonlight for the anti-fraud team on our weeks off!

So, there you have it. Hospitalists are poised to solve almost everything that’s wasteful in U.S. health care. OK, perhaps a little hyperbole on my part, but no field stands better situated to start saving $800 billion a year than ours!

Erik DeLue, MD, MBA, is medical director of the hospitalist program at Virtua Memorial Hospital in Mt. Holly, N.J. Check out Dr. DeLue’s blog and others on the Today’s Hospitalist Web site.