Healthcare Quality Gap (04-19-2004) 

According to headlines around the country, Medicare will go bankrupt in 2019 -- only 15 years away -- and we know that projection may even be the optimistic scenario. What could be worse than bankruptcy in the health benefits program that already covers 41 million Americans and will grow dramatically as millions of baby boomers join the Medicare-eligible population?

Even more disturbing than insolvency and its impact on the federal budget and deficits is how much money we waste every year in Medicare. While exact numbers are hard to pin down, no one disputes the fact that Medicare spends billions of dollars every year on health care that is not the evidence-based care recommended by medical experts. Various estimates have been made, but there is agreement that at least 30% of all care is either unnecessary, less than recommended, or downright harmful. Since Medicare will spend about $300 billion dollars in 2004, that means with a conserative estimate we will waste $90 billion dollars in Medicare alone, for just the federal government portion.

Quality Gap Table

One study, led by Elizabeth McGlynn and colleagues at Rand, published last June in the prestigious New England Journal of Medicine, confirmed that in nearly 50% of the cases studied (where there is no ambiguity about best treatments) the care received was not the care that is recommended by medical experts. Please see the attached powerful table from their study. All of us using our employer Medicare taxes, employee Medicare taxes and general revenues are wasting a lot of money, and we do this every year. Moreover, people who don't get the recommended care continue to suffer, and those who get harmful care are hurt, injured or may even die. The widely publicized reports from the Institute of Medicine provide ample documentation of these problems.

Maybe while everyone in Washington is in an understandable panic about Medicare bankruptcy, we can galvanize political and other national leaders to get much more real health out of our $1.6 trillion health care investment. Tinkering at the edges and cutting a rate here and a rate there will not get us the money we would need to pay for our lavish but flawed health care system. In fact, that approach squanders the opportunity to save real money while improving the quality of care and covering more people.

CMS, the federal agency that administers Medicare, has the data that would allow us to identify and weed out ineffective and harmful practices. Fortunately, they now have one of the smartest and most knowledgeable people in the country running it. He understands what needs to be done so there is hope at the moment that substantial progress can be made on the quality and patient safety front.

We are working with people throughout the country and especially in Washington to support CMS to make available data on quality, utilization and costs. We are also working with the National Quality Forum, the National Committee on Quality Assurance (NCQA), the Agency for Health Care Research and Quality (AHRQ), the Leapfrog Group and the Joint Commission on the Accreditation of Health Care Organizations (JCAHO) to make standardized, uniform health care quality information transparent, available and cost-effective to collect by using electronic systems.

We can save billions of dollars every year and have a better, safer health care system. The more we as purchasers and payers (including taxpayers) demand much more value from our investment, the better off everyone will be.

Helen Darling, President
National Business Group on Health
50 F St, NW-Suite 600
Washington, DC 20001
202-585-1805; fax 202-628-9244