Why we lose $700 billion – and how to get it back.
Seven hundred billion – sound familiar? Yes, that's the cost of the financial-services industry bailout, but it's also about the amount of money America is wasting every year on unnecessary healthcare expenses.
If we could take the steps needed to save that $700 billion, we could take "just" $100 billion to cover the uninsured and have $600 billion left over for Wall Street.
Here's the math: Our current healthcare spending is approximately $2.1 trillion (that's up from $1.3 trillion noninflation adjusted in 2000). We waste an estimated one-third – or about $700 billion – on unnecessary procedures, unnecessary visits to the doctor, overpriced pharmaceuticals, bloated insurance companies, and the most inefficient paper billing systems imaginable.
Saving that wasted money can begin with you and me. Medical experts say that 40 percent of our life expectancy can be attributed to lifestyle. We spend about $100 billion per year on costs related to obesity alone.
We must examine our role in healthcare. How often do patients visit the physician unnecessarily when a call to the nurse would have been fine? Or rush to get medication for every little cough? We spend 10 percent of all our medical care dollars in the last year of life – about $210 billion – much of which is fueled by demands from patients and families. To best understand how to deal with illness, patients need to make sure the lines of communication are open with their healthcare provider.
Surprisingly little is known even among doctors about whether one medicine works better than another. And in many situations, doctors don't even know how often a patient needs to be seen. Try this: Next time your physician says, "Come back in a year," ask, "Why aren't you telling me two years – or six months?" Asking questions and taking an informed role will help individuals understand how to get the right amount of care.
Rethinking the way we pay doctors would also help significantly to curb waste. Right now, many doctors have incentive to provide services, because they get paid for every one – whether an office visit or an operation. In different parts of the country, patients get two to three times as much care for the same disease, with the same result. If doctors practiced in the lower-cost way (again, with no difference to the patient), some experts estimate $50 billion in savings – just on Medicare expenses.