What Causes Unnecessary Healthcare Costs

What Causes Unnecessary Healthcare Costs?
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What Causes Unnecessary Healthcare Costs?
Healthcare Spending in the United States has escalated over the past decade. The leading
sources of healthcare spending include uncertainty in the clinical care, non-compliance with
evidence-based practice (EBP), overutilization of resources, and a slow implementation of the
integrated healthcare records (EHRs) (Chernew & Newhouse, 2012). The Organization for
Economic Co-operation and Development (OECD) indicates that the United States government
spends more than 16% of its gross domestic product (GDP) on healthcare (Cors & Sagin, 2011).
This statistic is the highest among industrialized nations in the world (Cors & Sagin, 2011).
Despite too much spending, the United States healthcare is not the best in the world. According
to the World Health Organization (WHO), the US ranks 37
overall position. Many periodical
publications report that too much care makes the U.S citizens poorer and sicker. The present
study examines possible strategies that can help to stop too much healthcare spending in the
United States.
Wasteful Clinical Care
To help combat overutilization and too much care, researchers have identified the
sources. Numerous experts believe that clinical care contributes significantly to the
overutilization of healthcare resources. In fact, a significant proportion of the US dollars wasted
can be reduced by approximately thirty percent. Reduction of clinical waste can redirect
substantial funds towards improving access to high-quality care (Delaune & Everett, 2008).
Extensive research shows that waste in the clinical care emerges from uncertainty, additional
care for non-urgent conditions, medical errors, and an inexplicable variation of the
comprehensive continuum of clinical services (Delaune & Everett, 2008). Additionally, Chernew
and Newhouse (2012) hold that process failures contribute to unnecessary care. The authors
maintain that sometimes physicians fail to do the right thing correctly. For instance, the under-
dose of asthma medications or the overdose of antibiotics for respiratory infections is a major
area of waste. Statistically, these clinical wastes account for over 10% of the healthcare spending
every year (Moynihan, Henry & Moons, 2014).
Overutilization in the clinical care is attributable to the underuse of disease management
frameworks in the United States. The government spends more money to influence substantial
outcomes of disease management that are cost-effective but not cost-saving. Moreover, Cors &
Sagin (2011) argue that the use of emergency department (ED) for non-urgent medical
conditions is a leading area that attracts too much health care. The authors believe that when
avoided, the overuse of emergency services for non-urgent conditions can save up to $24.2
billion annually. Overall, the clinical care witnesses the largest overutilization of medical
resources that in turn contribute to the skyrocketing health care costs. Researchers maintain that
physicians can spearhead cost-cutting efforts by offering services only to those who deserve
them. For instance, a patient with a running nose does not necessarily require any respiratory
antibiotics. Such a condition heals naturally within a short period.
Non-Compliance with Evidence-Based Practice (EBP)
The failure of physicians to implement evidence-based practice is a significant source of
unnecessary healthcare costs. Inability to comply with the established clinical guidelines and
procedures emanate from uncertainties experienced by the doctors. For example, the failure to
prescribe inhaled corticosteroids for asthmatic children causes unnecessary hospital visits.
Patients visit healthcare facilities and obtain wrongful prescriptions, which prompt for recurrent
consultation and duplication of processes. There are main reasons that underpin these failures.
For instance, the clinical care has many competing guidelines that address similar medical
conditions. The multiplicity of instructions causes confusion among the physicians regarding the
procedures to follow and the ones to discard.
Moreover, Bentley et al. (2008) believe that some procedures have more effects on costs
and outcomes than others. However, this fact remains unapparent to most practitioners
(Moynihan, Henry & Moons, 2014). Also, the recommended practice keeps on changing as
additional information becomes available. The integration of information with evidence-based
practice presents a significant challenge in the U.S healthcare (Delaune & Everett, 2008).
Researchers attribute too much care to stubborn patients who demand medical procedures that
conflict with the set practice. For example, some patients claim for antibiotics even when their
conditions do not require treatment (Cors & Sagin, 2011). As such, spending on such conditions
is wasteful.
Limited Adoption of Electronic Health Records (EHRs)
The Affordable Care Act (ACA) sensitizes the need for healthcare facilities to adopt
electronic health care records (Moynihan, Henry & Moons, 2014). However, reliable evidence
shows that the adoption of clinical information technologies remains limited. EHRs facilitate
guideline compliance and avoidance of adverse effects such as medical errors (Cors & Sagin,
2011). Also, the EHRs promote inter-operability that helps to improve the accuracy of patient
information. Further, Delaune and Everett (2008) reveal that continued use of paper medical
records (PMR) contributes to adverse effects of treatment including wrong drug prescriptions
and wrong site surgeries, which are leading areas of unnecessary spending (Delaune & Everett,
2008). Empirical evidence suggests that many physicians do not have access to computerized
decision support and patient information tracking technology (Moynihan, Henry & Moons,
2014). They primarily rely on single specialty practices. Failure to integrate sophisticated
technology in healthcare practice encourages unnecessary hospital visits patients (Moynihan,
Henry & Moons, 2014).
The federal government can incentivize the adoption of digital health systems as well as
provide patient education. Also, the U.S government should create a favorable environment for
private investors to use integrated information systems in healthcare practice. Moynihan, Henry,
and Moons (2014) believe that this strategy can improve patient treatment and enhance proper
data handling, especially past medical history that can promote accuracy and positive patient
outcomes. The suitability of EHRs is proven, and the U.S federal government should formulate
sound sensitization policies to oversee its application, especially in public healthcare facilities
(Cors & Sagin, 2011). Widespread implementation implies compliance that will prevent
opportunities for waste (Moynihan, Henry & Moons, 2014).
Despite expending too many resources on healthcare, the U.S federal government has not
achieved the desirable care outcomes. Researchers have attempted to uncover the sources of
avoidable costs of healthcare in the United States. The principal areas of unnecessary spending
include uncertainty in the clinical care, non-compliance to evidence-based practice, and a limited
adoption of electronic healthcare records system. The government can cut undesirable healthcare
costs by formulating favorable policies that guide practitioners and healthcare facilities to
consolidate efforts that leverage its objectives. Researchers suggest several strategies including
the provision of patient education, subsidizing the adoption of EHRs, and establishing a
favorable business environment for private investment in healthcare. These strategies can help
the U.S healthcare spending to correspond to an improved quality of care.
Bentley, T. G., Effros, R. M., Palar, K., & Keeler, E. B. (2008). Waste in the US health care
system: a conceptual framework. Milbank Quarterly, 86(4), 629-659.
Chernew, M. E., & Newhouse, J. P. (2012). Health care spending growth. Handbook of Health
Economics, 2(1), 1-43.
Cors, W. K., & Sagin, T. (2011). Overtreatment in Health Care: How Much Is Too
Much? Physician Executive, 37(5), 10-16.
Delaune, J., & Everett, W. (2008). Waste and inefficiency in the US health care system: Clinical
care: A comprehensive analysis in support of system-wide improvements. New England
Healthcare Institute.
Moynihan, R., Henry, D., & Moons, K. M. (2014). Using Evidence to Combat Overdiagnosis
and Overtreatment: Evaluating Treatments, Tests, and Disease Definitions in the Time of
Too Much. Plos Medicine, 11(7), 1-3.

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