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Hospital Waste a Major Contributor to High Cost of Healthcare

Much has been said about the impact of medical malpractice lawsuits on the increasing costs of healthcare. Although it has been disproven that medical lawsuit payouts are increasing (payouts for physician error have fallen every year since 2001) and that malpractice premiums are rising for physicians (they’re lower than they have been in years), many politicians and citizens are still pointing fingers at the legal system and calling for change. ProPublica, a public interest advocacy group, has begun to examine the true reasons why healthcare costs and insurance premiums for Americans are higher than ever. Among their findings: unjustifiably high administrative costs, high prices for treatment, over treatment, and medical supply waste, all said to be found at the hospital-level. Medical waste seems to be hardly discussed, but with constant talk of changing the Affordable Care Act and the need for controlling surging medical costs, medical experts have begun to speak up about the excessive amount of unused, perfectly good materials discarded from hospitals, physician offices, clinics, and medical centers in this country.

Medical Supply Waste: A Blessing and a Curse
In 2012, the National Academy of Medicine conducted a study that found that an estimated $765 billion a year was wasted on unused, unnecessary medical supplies and equipment. For a point of reference, the study authors noted that the amount of waste was more than the annual budget for the Department of Defense. It’s a jaw dropping fact to face and one that any hospital, nursing home, or clinic employee can attest to. Ultrasound machines, beds, walkers, and other equipment is discarded when newer models come out, or when something is considered a risk to patient safety or infection control. While the primary focus should always be the safety and health of patients, steps should be taken to address how hospitals can better manage their ordering and inventory in order to avoid waste at such an excessive level.

The catch 22 lies in the fact that many hospitals donate unopened, unused supplies and gently (or altogether unused) equipment to individuals or organizations that then redistribute the materials to countries or facilities in desperate need. ProPublica interviewed a veteran RN in Maine who previously worked as a nurse administrator of a hospital and a nurse in Saudi Arabia. The nurse, Elizabeth McClellan, now runs 4 warehouses filled with medical supplies and equipment that has been donated by hospitals and clinics from Maine, Vermont and Massachussetts. The materials are then shipped to her connections in Greece, Syria, Uganda and other countries who are in dire need of new supplies. Many of the countries are forced to use the same disposable medical supplies on hundreds or even thousands of patients. McClennan says that $20 million in medical waste is currently sitting in her 4 warehouses waiting to be redistributed. She acknowledges that it is this excessive waste by hospitals that enables her to help patients around the world, but says that she would like to talk to President Trump to show him exactly why American’s healthcare costs are so high.

Change is Possible
A 2016 study published in the Journal of Neurosurgery reported on findings from an investigation at the University of California San Francisco. The UCSF Department of Neurosurgery agreed to assess the supplies and materials being wasted per surgery on an annual basis. The study found that nearly $1,000 in waste occurred per surgery performed by the neuro team, with an annual total of $2.9 million. A separate JAMA study in 2016 divided all UCSF surgical departments into a control group and a test group whose aim was to make a conscious effort to reduce waste in order to secure a department bonus. The result? The test group reduced waste by 6.5%, which amounts to a savings of nearly $850,00 a year. If every healthcare institution in the country could identify waste, the savings to hospitals, clinics, offices, nursing homes and other facilities could be enough to cut down the excessive cost of providing medical care in this country.

There is a healthcare crisis in America. Costs are too high and quality care can be hard to come by. Before true change can occur, the causes must be identified and brought to the attention of lawmakers. Our problem is not lawsuits, but medical waste, over treatment, and astronomically high administrative costs. Here’s hoping Ms. McClellan gets her meeting with President Trump.