Tests of dubious value drive up health costs: study

By Joanne Kenen

WASHINGTON (Reuters) - For all the talk about aging baby boomers bankrupting the U.S. health care system, the real cost culprits may be tests and treatments of dubious value, according to a government study released on Tuesday.

Medical costs are growing far faster than the population is growing and aging, Congressional Budget Office Director Peter Orszag said in releasing the report. If nothing is done, health care would eat up half the economy in 75 years, he said.

"A lot of what we deliver is of dubious value," Orszag said.

Orszag, who is expanding his agency's health team before an expected deluge of health legislation in the next few years, called for a national push in public and private sectors to learn which treatments work best, and how they stack up against alternatives that may be older or cheaper but just as effective.

"It appears possible to reduce costs without harming outcomes," he said. "The nature of the long-term fiscal problem has been misdiagnosed," with policymakers placing too much emphasis on the aging population and not enough on cost effectiveness and quality.

Orszag cited work by a team of health researchers at Dartmouth College in New Hampshire who have shown that some parts of the country spend far more on health care and specialists than other regions, but do not have better quality or outcomes.

Congress and federal policy makers have focused heavily in recent years on cost projections for a graying population; relatively little federal attention has been paid to research on comparative costs or "evidence-based" medicine, he said.

The aging population is one factor in the cost explosion "but it is not by any means the main factor," he argued.