The Burrill Report


Tackling waste in the American healthcare system could trim 20 percent of total spending or more, according to former administrator of the Centers for Medicare and Medicaid Services Donald Berwick.

Instead of using cuts, such as reductions in payment levels, benefits structures, and eligibility, he says, a “less harmful” strategy would reduce waste by curbing overtreatment, failures of care coordination and process, administrative complexity, pricing failures, and billing fraud and abuse.

“The savings potentially achievable from systematic, comprehensive, and cooperative pursuit of even a fractional reduction in waste are far higher than from more direct and blunter cuts in care and coverage,” says Berwick, with co-author Andrew Hackbarth, in the April 11 issue of the Journal of the American Medical Association.

Healthcare costs could soar if the U.S. Supreme Court overturns the Patient Protection and Affordable Care Act, says a recent U.S. Government Accountability Office report. Berwick’s essay outlines other avenues by which expenditures could be reduced regardless of the court’s final decision on the Act.

Cost cutting measures in the Affordable Care Act, which Berwick played a critical role in crafting, are “necessary and prudent,” he says. But he calls “draconian” congressional suggestions that Medicare costs should be shifted to beneficiaries or payments to doctors and hospitals be reduced.

Instead, Berwick suggests that better healthcare practices, such as greater emphasis on patient safety processes and preventive care services, could have helped prevent between $102 billion and $154 billion in wasteful spending in 2011, while failures created by fragmented care represented between $25 billion and $45 billion in wasted expenditures. Billions of dollars more could be saved by eliminating things such as the excessive use of antibiotics, the use of needlessly complex billing procedures, the lack of transparency in diagnostics pricing, and fraudulent medical services scams—a recent area of focus for the U.S. Department of Justice.

Borrowing a model from the climate sciences, Berwick argues that no single tactic will be enough to head off the economic disaster that could be caused by continuing along the “‘business as usual’ curve of U.S. healthcare expenditure.” Instead, he says, pursuit of a portfolio of waste-reducing tactics will be necessary to reduce costs over time.



April 13, 2012
http://www.burrillreport.com/article-berwick_says_billions_can_be_saved_through_cutting_waste.html