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January 09, 2014 12:00 AM

Up to $27B in healthcare spending in Mass. could be considered wasteful, report finds

Andis Robeznieks
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    Massachusetts leads the nation in per capita healthcare spending—perhaps because up to 41% of that money is wasted.

    That's the finding of a new report from the state's Health Policy Commission (PDF), which concludes that between $14.7 billion and $26.9 billion spent on healthcare in 2012 could be considered wasteful. This includes $700 million in preventable acute hospital readmissions, $550 million in unnecessary emergency department visits, $10 million to $18 million spent on healthcare-associated infections, and $1 million to $2 million spent on inappropriate imaging for lower back pain, according to the report.

    Also, 5.9% of births in the state were elective inductions before 39 weeks, the report notes. Reducing this rate could save between $3 million and $8 million by lowering rates of Cesarean section and neonatal intensive care stays, according to the report.

    With 97% of its residents having health insurance, Massachusetts is the most-covered state in the nation and is seen as a template for national healthcare reform. But with 16.6% of its economy devoted to healthcare, it also spends proportionally more on healthcare than other states. In comparison, healthcare accounts for 15.1% of the national economy.

    The new report, which builds on the findings of a preliminary report released last month, found that operating expenses can vary by thousands of dollars per patient discharge—even after adjusting for complexity of care and regional wage differences.

    In addition, 5% of patients account for almost half of all healthcare spending among populations covered by Medicare and commercial insurers, it reports. Reducing spending on these high-cost patients by 10% could result in annual savings of nearly $1.8 billion, the study suggests.

    “Massachusetts has better overall healthcare quality performance and offers better access to care than many other states,” the report concluded. “However, considerable opportunities remain to further improve quality and access as well as population health.”

    The report was mandated by 2012 legislation that seeks to save roughly $200 billion over 15 years by setting spending targets, investing in public health and promoting new payment models.

    Follow Andis Robeznieks on Twitter: @MHARobeznieks

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        • - Hospital of the Future (Fall)
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