New Payment Models Could Motivate Providers to Cut Wasteful Services

The overuse of pricey medical technology and medication presents a complex challenge for policymakers, hospitals and doctors trying to reduce costs. But the payoff could be substantial, and early results of experiments by Medicare and Blue Cross and Blue Shield of Massachusetts suggest new payment models may be the motivation providers need to tackle the daunting task.

Unnecessary imaging, diagnostic and preventive tests (among other inappropriate services) inflated Medicare spending by $1.9 billion to $8.5 billion in 2009, researchers reported this week. The waste accounted for a small fraction of Medicare's overall expenditures that year—0.6% to 2.7%—but the study was limited to around two dozen overused medical services from hundreds that researchers considered.

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Source: Modern Healthcare