Morning Joe, Medicare's chief actuary estimates 15-30% of health care expenditures are wasteful.

Experts defend Medicare board
By: Sarah Kliff
May 25, 2011 05:00 AM EDT

The much-maligned Independent Payment Advisory Board finally has some champions.

One hundred health policy experts and economists sent a letter, obtained by POLITICO, to congressional leaders early this week urging legislators to back off their many attempts to repeal the health reform provision.

“We believe that an independent board is essential to promote, monitor and implement reforms that improve Medicare and the nation’s health care system,” they wrote.

The signers include notable centrist health economists, including Alice Rivlin of the Brookings Institution, along with many liberal health policy scholars.

http://www.politico.com/news/stories/0511/55622.html

Excerpt from: Squandering Medicare's Money

The full extent of Medicare payments for procedures with no known benefit needs to be quantified. But the estimates are substantial. The chief actuary for Medicare estimates that 15 percent to 30 percent of health care expenditures are wasteful. Medicare spending exceeded $500 billion in 2010, suggesting that $75 billion to $150 billion could be cut without reducing needed services.

Why does Medicare spend so much for procedures and devices on patients who get no benefit and incur risks from them?

One reason is that Medicare’s reimbursement procedures are not sophisticated enough to track the appropriateness of the care provided. Medicare delegates its claims administration to private local contractors based on how quickly and cheaply they can process claims.

These contractors have few incentives to audit the taxpayer dollars they are paying out, and even if they wanted to, they would need information often not available on the claim form. For example, a claims administrator, processing a claim for a screening colonoscopy, does not know when the patient’s last colonoscopy was, or whether there was a new clinical reason for repeating it. While this information is available, finding it would require extra steps, and there are no incentives to do so.

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http://www.nytimes.com/2011/05/26/opinion/26redberg.html?ref=opinion&pagewanted=print