US healthcare wastes $750 billion annually, cuts short 75,000 lives, says IOM

New Institute of Medicine report calls for a data-driven, 'continuously learning' healthcare system

A new IOM report, “Best Care are Lower Cost: the Path to Continuously Learning Health Care in America,” makes a case that the current system is too complex and costly to continue—something that few would dispute. But the numbers it highlights--$750 billion in waste on unnecessary, excessive administration, fraud and other costs services (30% of current total expenditures); 75,000 deaths averted; and fragmented, contradictory care guidelines for the 75 million Americans with chronic diseases—are likely to become political footballs in the current election season.

In fact, those data points have been reviewed and discussed previously; the $750-billion figure comes from a 2010 IOM workshop, and align with both earlier and later estimates cited in the report. What the report authors, members of the Committee on the Learning Health Care System in America of IOM, want to focus attention on is the value of realigning healthcare to a system “in which science and informatics, patient-clinician partnerships, incentives, and culture are aligned to promote and enable continuous and real-time improvement in both the effectiveness and efficiency of care—is both necessary and possible for the nation.” The infrastructure to support this would involve widely connected information systems, real-time data sharing and analysis, and close collaboration both between treatment teams and between clinicians and patients.

The pharma industry is mentioned only peripherally in the report; one standout statistic (from 1992) reminds readers that it took 13 years for then-new thrombolytic drugs for heart attack to go from “shown to be effective” to “when most experts recommended the treatment”—a delay that probably cost thousands of lives in the intervening years, and a prima facie argument for the value of pharma marketing and education programs. More broadly, “As a result of this slow diffusion of knowledge and other factors, Americans receive only half of the preventive, acute, and chronic care recommended by clinical guidelines and approximately 60 percent of recommended pharmaceutical treatments.” The report also calls for “health product innovators” (including the pharma industry) to help build and operate information systems that help patients learn better health practices.