Excess Medical Spending Reaches Nearly $7 Billion in a Year

Researchers cite 'astronomical costs' associated with prescribing of brand name statins when generic alternatives were available.

Researchers at Mount Sinai School of Medicine have found that $6.7 billion was spent in 1 year performing unnecessary tests or prescribing unnecessary medications in primary care, with 86% of the cost attributed to the prescription of brand-name statins to treat hypercholesterolemia, according to findings published in the Archives of Internal Medicine.

Led by Minal Kale, MD, the research team reviewed findings from a study published in the May 2011 issue of Archives of Internal Medicine, which identified the top five most overused clinical activities in each of three primary care specialties: pediatrics, internal medicine, and family medicine. With this information, they performed a cross-sectional analysis of separate data that were pulled from the National Ambulatory Medical Care Survey and the National Hospital Ambulatory Medical Care Survey. The authors found that there was more than $6.7 billion in excess healthcare spending in the primary care setting in 2009, with more than $5.8 billion (86%) of the unnecessary spending resulting from the prescribing of brand-name statins rather than generic versions.

“Our analysis shows astronomical costs associated with prescribing of brand name statins when effective, generic alternatives were available. Efforts to encourage prescribing of generics clearly have not gone far enough,” said Dr. Kale in a statement. “Additionally, millions are spent on unnecessary blood work, scans, and antibiotic prescriptions. Significant efforts to reduce this spending are required in order to stem these exorbitant activities.”

The remaining costs were attributable to the following:

  • During physical exams, more than half of complete blood work ordered was not needed, resulting in more than $32 million in excess costs;
  • Unnecessary bone density scans in younger women accounted for more than $527 million;
  • CT scans, MRIs, or X-Rays in people presenting with back pain accounted for $175 million in excess healthcare costs;
  • Over-prescription of antibiotics for sore throat in children, excluding cases of strep throat or fever, accounted for $116 million in unnecessary costs;
  • Other excess costs included needless annual echocardiograms, urine testing, pap tests, and pediatric cough medicine prescriptions.

“We found considerable variability in the frequency of inappropriate care, however our data show that even activities with small individual costs can contribute substantially to overall healthcare costs,” said Dr. Kale. “In light of the current healthcare reform debate, we need more research examining how overuse contributes to healthcare spending. Research might focus on the potential role of reimbursement, defensive medicine practices, or lack of adherence to guidelines."

The authors noted that the analysis is limited to the data provided by the surveys, and that they were conservative in their assessments. They concluded that this type of analysis should be extended to medical specialties outside of primary care and that physicians should make efforts in their own practices to evaluate costs and reduce them where necessary in order to achieve affordable, high-quality care.