Unbiased Analysis of Today's Healthcare Issues

Millions wasted on unnecessary test

Written By: Jason Shafrin - May• 22•06

Forbes reported last week (“Millions…“) that millions of dollars are wasted each year due to unnecessary tests. Their findings are based on an article by Dr. Dan Merenstein and co-authors and is to appear in the June issue of the American Journal of Preventive Medicine.

What is the definition of an unnecessary test? The United States Preventive Services Task Force grades each test on a scale from A to D. For tests which receive ‘C’ grade, the panel has made no recommendation either for or against its use. For tests which receive a grade of a ‘D,’ the panel recommends against giving the test due to harmful side-effects or additional stress placed upon the patient.

The study examines three tests given a ‘D’ rating by the panel: EKG or electrocardiogram, urinalysis and chest X-ray. The authors looked at over four thousand routine exams for adults over age 21. Forbes reports:

At least one of the three “D” interventions was ordered 43 percent to 46 percent of the time, the researchers said.

Using extrapolation techniques, Merenstein and his colleagues determined that direct medical costs for the three “D” tests ranged from $47 million to $194 million. Adding in two other tests from the “C” category pushed the costs up by another $12 million to $63 million.

Merenstein concluded that:

“Doctors could do it [provide unnecessary tests] to appease patients or because the physicians themselves think they’re supposed to do them. And, if they owned a lab, some doctors did it for financial reasons,”

This is hardly surprising. In a fee-for-service environment, physicians have an incentive to over-treat. Since patients usually have insurance and thus do not feel the full cost of the service, they also have little incentive to restrict the physician from conducting tests. If patients did have to pay the full cost for the test, they would certainly be more hesitant to accept to pay for these unnecessary procedures.

Health insurance should not be a formed of forced savings where all services are covered. If society desires to reduce the cost of health insurance, choosing insurance plans which only cover serious medical problems–and not routine check-ups–is one of the more effective, free-market means.

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