It’s been a bleak month for those who follow health-care economics. (And yes, they’re probably all bleak if that’s what you do for a living.) A widely reported study by the Institute of Medicine found that waste in the system accounted for $750 billion in unnecessary services, excessive administrative costs, fraud and other problems, some 30 percent of the total expenditure. Even to someone who went into editing because they said there’s no math involved, 30 percent waste is a pretty astonishing figure.
A couple of less-publicized news reports highlight different approaches to wasted health-care dollars. One sees opportunity, one sees something less benign.
Reuters reports, “In one sign of the growing importance of healthcare to the economy, S&P Dow Jones Indices added health insurer UnitedHealthcare to the Dow Jones industrial average, replacing Kraft Foods.” The article adds, “ ... the race to cut costs is creating profits in parts of the industry.”
A slightly different take on waste came in a report from the Washington-based Center for Public Integrity.Over the last decade, a study by the group suggests that cases of potential “upcoding” by thousands of physicians and hospitals, in part aided by the use of EMRs, “have added $11 billion or more to their fees ... signaling a possible rise in medical billing abuse.”
Among the investigation’s key findings:
“Doctors steadily billed Medicare for longer and more complex office visits between 2001 and the end of the decade even though there’s little hard evidence they spent more time with patients or that their patients were sicker and required more complicated, and time-consuming, care. The higher codes for routine office visits alone cost taxpayers an estimated $6.6 billion over the decade.
“More than 7,500 physicians billed the two top paying codes for three out of four office visits in 2008, a sharp rise from the numbers of doctors who did so at the start of the decade.
“The most lucrative codes are billed two to three times more often in some cities than in others, costly variations government officials said they could not explain or justify. In some instances, higher billing rates appear to be associated with the burgeoning use of electronic medical records and billing software.”
Medical societies dispute the suggestion of increased fraud, and the study cites CMS officials who say that most doctors and hospitals are “honest and try to bill Medicare correctly ... .” Still the report implies that after years of failing to correctly code for all that they do, some physicians are simply recouping money that they previously failed to collect. “I’m not sure it’s malicious. It’s a fact a life,” says one industry consultant.
On one hand, the carrot of profit-driven cost-cutters. On the other, the stick of fraud-seeking government regulators. No wonder they call it dismal.