"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Thursday, September 13, 2012

Care Wastes $750 Billion Per Year

Last week, there was a story in all of the major media outlets regarding US health care wasting $750 billion per year.  That is approximately 30 cents of every health care dollar.  The culprits are needless care, outdated paperwork, fraud and other waste according to the Institute of Medicine (IOM).  The US has seen a virtual explosion of technical advancements in medicine and yet our outcomes don't reflect it. 

Now for the rest of the story.  What IOM fails to describe is a national payment system that has been driven by volume not value, at least until recently for some of us; the practice of defensive medicine due to little to no protection for physicians in many states including Maryland; outdated paperwork required by our government (in some cases paperwork that can only be completed on a typewriter, talk about byzantine) and a demonstrated lack of guidelines and requirements for the practice of medicine on the part of physician groups and associations, again, at least until recently.  Can the health care industry make a dramatic impact on such "waste?"  Of course, but it takes a village.  At WMHS, we have done some amazing things to improve quality, address over utilization, reduce readmissions, address unnecessary admissions, enhance patient education and the discharge process, case manage high utilizers of our ED and other services and the list goes on.  Our health system is now paid on a value- based payment methodology; however, many of our physicians are still paid on the fee-for-service or volume-based payment system.  We have seen a dramatic turnaround in the last year alone in addressing what the IOM calls waste and poor quality.  There has to be a more dramatic, concerted effort across government and our industry before any substantial savings can result throughout the health care industry.  However, it continues to be extremely satisfying to know that WMHS is so far ahead of the pack in this instance.

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