It is received wisdom amongst Human Resource professionals that the exit interview–that which is had when an employee is departing –is an invaluable tool in understanding and improving an organization.
That said, Dr. Donald Berwick has left the Centers for Medicare and Medicaid Services, after 17 months of serving as its head.
His parting assessment?
According to the New York Times Dr. Berwick says
that 20 percent to 30 percent of health spending is “waste” that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by his agency.
The official, Dr. Donald M. Berwick, listed five reasons for what he described as the “extremely high level of waste.” They are overtreatment of patients, the failure to coordinate care, the administrative complexity of the health care system, burdensome rules and fraud.
“Much is done that does not help patients at all,” Dr. Berwick said, “and many physicians know it.”
According to the U.S. Census Bureau, in 2009 we spent $2.4863 trillion on health care.
I’m going to write that out because as I’ve long maintained, most people (myself included) have difficulty understanding what a billion dollars is (ten, one hundred millions, or a thousand million), no less a trillion (ten, one hundred billions or a thousand billions )–nor 2.4863 of them.
Let’s just think conservatively for the moment and suppose, hypothetically, that contrary to all that Human Resources talk about frankness in departure, Dr. Berwick was disgruntled and doubled his numbers:
So instead of 20 to 30% waste we’re looking at 10 or 15%
10% = $248.63 billion or $248,630,000,000 in waste.
15% = 372.945 billion or $372,945,000,000 in waste.
And if he’s approximately right? If somewhere between “20 percent to 30 percent of health spending is ‘waste’ that yields no benefit to patients”
25% = $621.575 billion or $621,575,000,000 in waste.
Some context is in order. What can you do with a wasted (10%) 248 or (25%) 621 billion dollars? This below, is from the Congressional Budget Office. The 2009 numbers are actual, the rest of the years are outlay projections– in billions. And no, that’s not a typo– Social Security cost $678 billion, Medicaid $251 billion.