News Feature | May 19, 2014

Medicare Wasted Up To $8.5 Billion In Useless Procedures

By Jof Enriquez,
Follow me on Twitter @jofenriq


A recent study conducted by researchers at the Harvard Medical School Department of Health Care Policy revealed that Medicare wasted billions of dollars on unnecessary, low-value treatments in 2009.

According to the study, which was published recently in JAMA Internal Medicine, Medicare payments for 21.9 million procedures with little or no clinical benefit to patients amounted in as much as $8.5 billion, or 2.7 percent of total spending in 2009 alone.

Researchers calculated that amount using a broad definition of wasteful services. After applying a narrower definition to account for possible exceptional clinical benefits, the data yielded a still substantial cost of $1.9 billion or 0.6 percent of total spending, used to cover 9.1 million low-value procedures done that year.

The study analyzed claims from 1,360,908 Medicare beneficiaries in 2009 who received 26 types of health services that were deemed low-value according to sources that included medical journals, the American Board of Internal Medicine Foundation's Choosing Wisely initiative, and the U.S. Preventive Services Task Force, according to NPR.

These low-value procedures include surgeries such as arthroscopic debridement for knee osteoarthritis, advanced imaging like MRI and CT scans for simple low back pain, and screening tests such as cervical cancer screening for women aged 65 years and older. 

According to the study, at least one in four Medicare beneficiaries received one of these procedures in 2009. “We suspect this is just the tip of the iceberg," J. Michael McWilliams, MD, PhD said in a Harvard news release.

In an interview, McWilliams and fellow author of the study Aaron Schwartz of Harvard Medical School said that the actual number of low-value services was higher, since their study covered just 26 tests and procedures. “There are hundreds of other low-value services," said McWilliams.

According to a report by the Institute of Medicine, “30 percent of health spending in 2009 — roughly $750 billion — was wasted on unnecessary services, excessive administrative costs, fraud, and other problems.”

The Harvard researchers believe that the methods used in their study can be valuable tools for measuring the effectiveness of the Affordable Care Act, among other reform measures.

“It’s exciting that we now have a tool to measure how well global budgets and similar reforms perform at the specific task of cutting wasteful spending,” Schwartz said in the Harvard press release.

In an editor’s note quoted by Medscape Medical News, JAMA Internal Medicine deputy editor Mitchell H. Katz, MD, wrote: "This [study] highlights the opportunity for eliminating unnecessary care, and we hope that others will use and improve the methods developed by the authors. Most important, we hope that development of better measures of low-value care will ultimately spur development of interventions to reduce unnecessary care."