Wasteful Health Care Spending

Excessive Administrative Costs in Healthcare
One of the main reasons for high healthcare costs in the United States is administrative costs, which take up to a quarter of the total costs. This is due to the highly fragmented insurance system in which there are multiple payers, which in turn require a lot of billing, claims, and insurance verification (Cai et al., 2020). Much time and money is typically devoted to organizing numerous reimbursements, insurance guidelines, and prior authorization procedures in healthcare organizations such as hospitals, clinics, and individual practices. This is contradictory with efficient, streamlined systems that are in place in the rest of the developed countries, especially Canada, Germany, and the United Kingdom. U.S. healthcare is characterized by costly, skittish, and time-consuming documentation, claim adjudication, and never-ending appeals (Cai et al., 2020). Furthermore, there is much confusion regarding the insurance policies and coverage criteria, which adds more burden to the providers and patients without directly impacting patient care.

Why Administrative Costs Are Wasteful
Administrative costs are costly because they consume valuable financial and human resources in healthcare while not increasing patient benefits. The paperwork, coding, and insurance negotiations take much time for the clinician and limit the effectiveness of the care being provided (Himmelstein et al., 2020). Much time is spent on documentation and administrative work at the cost of direct patient care delivery, which increases the burnout rate among physicians and nurses. In addition, billing mistakes and disagreements lead to extra expenses for staff to address claims, appeals, and compliance reviews (Himmelstein et al., 2020). These costs add to the general healthcare expenses, affect insurance prices, and cause patients to pay more without improving their health.

Impact of Eliminating Administrative Waste
Reducing wasteful overhead costs would go a long way in enhancing healthcare efficiency, affordability, and availability. The insurance procedures should be made more efficient, the reimbursement should be less complicated, and there should be the use of a unified and seamless, exclusive electronic health records system (Cai et al., 2020). This would free the time of physicians and nurses to attend to the patients, thus improving the quality of health care and reducing the rate of burnout among the providers. Cutting administrative costs could decrease insurance costs and other expenses that patients must meet before receiving treatment, thus making healthcare more accessible and affordable (Himmelstein et al., 2020). Finally, redirecting funding from overhead costs supports moving to modern, improved care, mental health, and chronic disease care, which would enhance the healthcare delivery system and, therefore, improve the health of the American people.

Wasteful Health Care Services

Unnecessary Diagnostic Imaging
One of the most wasteful healthcare services is diagnostic imaging for uncomplicated medical issues such as managing non-specific low back pain. In the case of acute lower back pain, many physicians prescribe X-rays, CT scans, and MRIs regardless of the absence of clinical signs of serious pathology (Müskens et al., 2022). There is a need to try conservative measures such as physical therapy and the use of pain-relieving medications before turning to imaging. Nonetheless, defensive medicine, financial motivation, and patients’ expectations lead to the excessive use of these costly tests. Inappropriate imaging not only drives up the cost of care but also risks the patient to unnecessary radiation, leading to further unneeded procedures due to incidental findings.

Why Unnecessary Imaging Is Wasteful
Overusing diagnostic imaging is costly and potentially harmful because it does not change management plans or outcomes but adds to costs. Research has indicated that most acute lower back pain patients do not require imaging. However, many clinicians still order tests because of legal concerns or patient pressure (Albarqouni et al., 2022). Overuse of performance imaging results in false-positive imaging, requiring other useless diagnostic tests, explorations, and operations. This has the effect of straining the health system, using resources that could be channeled to other potentially beneficial treatments in providing healthcare to the many patients who consult doctors for such ailments. This creates stress among patients, which makes them get extra and perhaps unnecessary tests done.

Impact of Eliminating Unnecessary Imaging
The reduction of the use of unnecessary diagnostic imaging is beneficial in the reduction of healthcare costs without compromising the quality of patient care. Strictly following the guidelines developed based on the evidence, it is possible to avoid radiation exposure, minimize the occurrence of incidental findings that lead to further treatment, and decrease healthcare costs (Walther et al., 2023). The resultant savings on low-value imaging can be channeled toward patient education and physical therapy programs. Moreover, limiting imaging overuse would also help decrease insurance costs, reduce the patients’ out-of-pocket expenses, and increase the value of the American healthcare system by focusing on the necessary and effective use of imaging services.
 
References
Albarqouni, L., Arab-Zozani, M., Abukmail, E., Greenwood, H., Pathirana, T., Clark, J., … & Moynihan, R. (2022). Overdiagnosis and overuse of diagnostic and screening tests in low-income and middle-income countries: a scoping review. BMJ Global Health, 7(10), e008696. https://gh.bmj.com/content/7/10/e008696.abstractLinks to an external site.

Cai, C., Runte, J., Ostrer, I., Berry, K., Ponce, N., Rodriguez, M., … & Kahn, J. G. (2020). Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses. PLoS Medicine, 17(1), e1003013. https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003013Links to an external site.

Himmelstein, D. U., Campbell, T., & Woolhandler, S. (2020). Health care administrative costs in the United States and Canada, 2017. Annals of Internal Medicine, 172(2), 134-142. https://www.acpjournals.org/doi/abs/10.7326/m19-2818

Müskens, J. L., Kool, R. B., van Dulmen, S. A., & Westert, G. P. (2022). Overuse of diagnostic testing in healthcare: a systematic review. BMJ Quality & Safety, 31(1), 54-63. https://qualitysafety.bmj.com/content/31/1/54.abstract

Walther, F., Eberlein-Gonska, M., Hoffmann, R. T., Schmitt, J., & Blum, S. F. (2023). Measuring appropriateness of diagnostic imaging: a scoping review. Insights into Imaging, 14(1), 62. https://link.springer.com/article/10.1186/s13244-023-01409-6