Excessive administrative costs on the part of insurers explain some of those squandered dollars, but unnecessary and inefficiently delivered services on the part of physicians, hospitals, and other providers account for the lion's share of the $750 billion, said the report, which was released online today.
This attention-grabbing statistic is reminiscent of the oft-quoted figure for deaths attributable to medical error — up to 98,000 each year — found in a 1999 IOM report titled To Err Is Human: Building a Safer Health System. That report helped spark an ongoing campaign for patient safety. The new IOM report, titled Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, aims to build on the 1999 study and other blueprints for progress from the IOM.
For all the dramatic advances in biomedical knowledge, drugs, and procedures, the healthcare industry lags behind other industries in terms of operating smarts, the new IOM report says. "If banking were like healthcare, automated teller machine (ATM) transactions would not take seconds but perhaps days or longer as a result of unavailable or misplaced records." In the same vein, airline pilots would be free to dispense with preflight safety checks and retail stores would not display product prices in the aisles. Hospitals, physicians, and insurers, the report said, have much to learn from the best practices in other fields.
The healthcare system also suffers from informational logjams. "The sheer volume of new discoveries stresses the capabilities of the system to effectively generate and manage knowledge and apply it to regular care," the report states. Case in point: It took 13 years for most experts to recommend the use of thrombolytic drugs to treat heart attacks after the therapy proved itself to be effective.