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Low-Cost Services a Major Player in Unnecessary Health Spending

Last Updated: October 12, 2017.

The costs associated with low-cost, low-value health services are nearly twice as high as those of high-cost, low-value services, according to a study published in the October issue of Health Affairs.

THURSDAY, Oct. 12, 2017 (HealthDay News) -- The costs associated with low-cost, low-value health services are nearly twice as high as those of high-cost, low-value services, according to a study published in the October issue of Health Affairs.

John N. Mafi, M.D., M.P.H., from the University of California, Los Angeles, and colleagues examined which of 44 low-value services contribute the most to unnecessary costs. For their analysis, they used 2014 data from the Virginia All Payer Claims Database for 5.5 million beneficiaries.

The researchers found that 93 percent of the 1.7 million low-value services used were low- and very-low-cost, compared with 7 percent that were high- and very-high-cost, low-value services. The total cost for low- and very-low cost services was nearly double that of high- and very-high-cost services (65 versus 35 percent; $381 million versus $205 million, respectively). Overall, more than $586 million, or $9.90 per beneficiary per month, was spent unnecessarily on these low-value services.

"These findings also suggest that in the aggregate, minor actions by all clinicians can have a sizable impact on reducing unnecessary health care spending," the authors write.

One author disclosed financial ties to the pharmaceutical industry and is a co-developer of a health waste calculator.

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