What Causes Unnecessary Healthcare Costs

Running head: WHAT CAUSES UNNECESSARY HEALTHCARE COSTS? 1

What Causes Unnecessary Healthcare Costs?

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WHAT CAUSES UNNECESSARY HEALTHCARE COSTS? 2

What Causes Unnecessary Healthcare Costs?

Introduction

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

WHAT CAUSES UNNECESSARY HEALTHCARE COSTS? 3

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.

WHAT CAUSES UNNECESSARY HEALTHCARE COSTS? 4

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,

WHAT CAUSES UNNECESSARY HEALTHCARE COSTS? 5

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).

Conclusion

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.

WHAT CAUSES UNNECESSARY HEALTHCARE COSTS? 6

References

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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