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Avoidable health care costs total $200 billion annually

More than $200 billion of avoidable health care costs are accrued each year as a result of medicine not being used responsibly by patients and health care professionals, according to data in a new study recently published by the IMS Institute for Healthcare Informatics.

According to the report, the $200 billion represents 8% of the country’s total annual health care expenditures and amounts to millions of avoidable hospital admissions, outpatient treatments, pharmaceutical prescriptions and ED visits.

Researchers evaluated six areas that contribute to unnecessary costs, including medication nonadherence; delayed evidence-based treatment practice; misuse of antibiotics; medical errors; suboptimal use of generics; and mismanaged polypharmacy in older adults. They found that those areas lead to unnecessary use of health care resources, including an estimated 10 million hospital admissions; 78 million outpatient treatments; 246 million prescriptions and 4 million ED visits annually.

“As our study makes clear, drugs are often not used optimally, resulting in significant unnecessary health system spending and patient burdens,” Murray Aitken, executive director of the IMS Institute for Healthcare Informatics, said in a press release. “Those avoidable costs could pay for the health care of more than 24 million currently uninsured US citizens. Reaching a meaningful level of consensus and alignment among stakeholders, based on measured and proven success models, is a key step to unlocking the $200 billion opportunity identified in our study.”

However, researchers found that medication adherence for three of the most prevalent chronic diseases — hypertension, hyperlipidemia and diabetes — has increased by about 3% since 2009. Patients assigned antibiotics to treat a cold or influenza has decreased from 20% to 6% since 2007. Also, generic medication use has reached 95% for those diseases in which lower-cost generic medications are available.

Click here to see the full report.