Inquirer Editorial: Health costs force response

An authoritative study revealing sweeping waste and inefficiency in the U.S. medical system offers new hope that the runaway escalation of health-care costs might contain a silver lining of sorts.

At first blush, of course, it's nothing short of scandalous that the Institute of Medicine study found the nation's $2.5 trillion health-care system wastes as much as 30 cents on every dollar.

The squandering of resources results from unneeded tests and services, and from inefficiency stemming from a glut of paperwork and administrative waste. Fraud remains a problem, too. And prevention efforts - while growing by impressive leaps - fall short in protecting patients from life-threatening infections, rehospitalizations, and medical errors.

Given so much waste, it's no wonder that double-digit hikes in health insurance premiums have been the rule during so many recent years.

Those increases - thankfully, reported to be moderating this year - have driven businesses to scale back or even drop health coverage for workers. Meanwhile, the cost of health insurance has put it beyond the reach of nearly 50 million Americans.

But the news that there's overspending on such a monumental scale happens to come at a pivotal and opportune moment for the nation's health system, which is undergoing a massive overhaul as the federal Affordable Care Act is rolled out.

The signature legislative achievement of President Obama should make health insurance accessible to millions of the uninsured. To achieve that goal, though, the ACA calls on insurers and health-care providers to run leaner operations, reduce costly errors, and stress patient results rather than practice what might be called "turnstile medicine."

Critics calling for the repeal of what they denigrate as "Obama-care" have questioned whether federal reform will moderate costs. Now, with the Institute of Medicine data in hand, it's clear that the law's aims are feasible - if only because there literally are billions of extra dollars sloshing around in the health-care system.

It's more important than ever, then, to pursue the cost savings and efficiency reforms called for under the ACA. Those reforms include better coordination and initiatives to boost the quality of subpar care, which the Institute of Medicine says currently costs up to 75,000 lives yearly.

In addition, the law's expansion of Medicaid, whose enrollees are already straining waiting rooms in some regions, offers an opportunity to direct more patients to medical care that may not require a physician's attendance. That could cut costs further, as well as lead to even more jobs in the medical professions.

By clawing back even a small portion of the $750 billion that the study found is being wasted, the nation clearly has the ability to expand access to health insurance coverage, and also improve medical care for millions.

So, while it's unusual that a report of massive waste would be any cause for optimism, the revelations on health spending seem to offer that rare instance.