Up to One-Third of Health Spending Is ‘Waste,’ Former CMS Head Tells NYT

Dec 5, 2011 12:36pm

There’s an “extremely high level of waste” in federal health spending, ranging between 20 and 30 percent, the freshly departed head of the Centers of Medicare & Medicaid Services told the New York Times.

“Much is done that does not help patients at all,” said Dr. Donald M. Berwick, who was temporarily appointed by President Obama to head CMS. “And many physicians know it.”

Berwick listed five reasons for the waste, as reported by the NYT: “overtreatment of patients, the failure to coordinate care, the administrative complexity of the health care system, burdensome rules and fraud.”

Berwick’s comments come at a time when the U.S. Department Health and Human Services is shuffling to manage and allocate billions of dollars into implementing the Affordable Care Act amid an ideological and political debate about its future.

The Office of Inspector General has urged CMS to improve its oversight of hospitals and other health care providers, as well as ramp up enforcement of rules and cut overpayment.

Berwick’s appointment was the subject of much partisan debate. Republicans vowed to block his appointment, citing an old document in which he once praised the British health care system. President Obama appointed him to a temporary term while Congress was in recess.

But the former Harvard professor resigned before his term was up at the end of the year. In a letter to his colleagues, he called his departure “bittersweet.”

“Government is more complex than I had realized,” Berwick told the New York Times. “Government decisions result from the interactions of many internal stakeholders — different agencies and parts of government that, in many cases, have their own world views.”

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