Low-Cost Services Contribute to Unnecessary Health Spending

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Costs associated with low-cost, and low-value health services are almost twice as high as those of high-cost, low-value services.
Costs associated with low-cost, and low-value health services are almost twice as high as those of high-cost, low-value services.

HealthDay News — The costs associated with low-cost, low-value health services are nearly twice as high as those of high-cost, low-value services, according to a study published in Health Affairs.

John N. Mafi, MD, MPH, from the University of California, Los Angeles, and colleagues examined which of 44 low-value services contribute the most to unnecessary costs. For their analysis, they used 2014 data from the Virginia All Payer Claims Database for 5.5 million beneficiaries.

The researchers found that 93% of the 1.7 million low-value services used were low- and very-low-cost, compared with 7% that were high- and very-high-cost, low-value services. 

The total cost for low- and very-low cost services was nearly double that of high- and very-high-cost services (65% vs 35%; $381 million versus $205 million, respectively). Overall, more than $586 million, or $9.90 per beneficiary per month, was spent unnecessarily on these low-value services.

"These findings also suggest that in the aggregate, minor actions by all clinicians can have a sizable impact on reducing unnecessary health care spending," the authors write.

Disclosures: One author disclosed financial ties to the pharmaceutical industry and is a co-developer of a health waste calculator.

Reference

Mafi JN, Russell K, Bortz BA, Dachary M, Hazel WA Jr, Fendrick AM. Low-cost, high-volume health services contribute the most to unnecessary health spending. Health Aff (Millwood). 2017;36(10):1701-1704.

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