U.S. health system wastes $750B per year, needs major overhaul: IOM report

September 7, 2012
Brandon Glenn
Brandon Glenn

Despite advances in technology, knowledge, and innovation, the U.S. health system comes up short on basic fundamentals such as quality, outcomes, cost, and equity, according to the Institute of Medicine.

Despite advances in technology, knowledge and innovation, the U.S. health system remains a paradox – coming up short on basic fundamentals such as quality, outcomes, cost, and equity.

That was a major conclusion from a report by the Institute of Medicine (IOM) that recommended ways to create what its authors call a “continuously learning healthcare system.”

The report contains at least one staggering statistic: an estimate that the nation wasted $750 billion in 2009 on unneeded care, excessive paperwork, fraud, and other waste. That amount is more than the Pentagon's annual budget.

Examples of unneeded care cited in the report include most repeat colonoscopies within 10 years of a first such test, early imaging for most back pain, and brain scans for patients who fainted but didn't have seizures, the Associated Press reported.

The report makes several recommendations on how the healthcare system can be transitioned to one that is “continuously learning,” including making better use of technology and data.

“Data generated in healthcare delivery - whether clinical, delivery process, or financial - should be collected in digital formats, compiled, and protected as resources for managing care, capturing results, improving processes, strengthening public health, and generating knowledge,” the report states.

That responsibility lies not only with the government, but with private payers and medical products companies, too, according to the IOM.

Physicians can play a big part in improving healthcare by more fully involving patients in their own care. Clinicians should make “high-quality tools” available to patients to facilitate shared decision-making, the report recommends.

Payment models, of course, didn’t escape the report’s scrutiny. The prevailing fee-for-service model “encourages wasteful and ineffective care,” according to the report. Instead, payers should move toward value- and outcomes-based payments.

In an editorial, Archives of Internal Medicine Editor Rita Redberg, MD, called the IOM report “an invaluable resource” for the many players in the healthcare system that need to buy into the concept if the United States is ever able to create a “continuously learning” system.

“The IOM report cautions us that as we embrace advances in healthcare, we must remember that a number of what were thought to be advances turned out to not be beneficial, or even to be harmful, such as prostate-specific antigen...screening or some breast cancer treatments,” Redberg wrote.

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