NCPA - National Center for Policy Analysis


July 16, 2008

Californians can save more than $1 billion each year by eliminating unnecessary medical treatments, using less-expensive but equally effective drugs and reducing other kinds of waste from the health care system, said a report released yesterday by the California Public Interest Research Group (CALPIRG).

CALPIRG researchers found that $700 million could be saved if doctors and hospitals followed "best practice" standards recommended by leading medical organizations.  Extending those standards to all patients in the state would greatly increase the savings, says the report.

Other major findings:

  • U.S. health spending on a per-capita basis topped $7,000 in 2006, nearly twice as much as in Canada, Australia, Sweden and the United Kingdom.
  • Medical bills in California totaled $167 billion in 2004, the last year for which data were available.
  • Hospitals in Sacramento, which was ranked No. 1 in terms of efficiency, spent an average of $26,000 on each Medicare patient during the final two years of life.
  • San Diego's average was $30,200.
  • Los Angeles ranked at the bottom of the list, with average spending of $43,500.

Hospitals and doctors in San Diego and Sacramento are more efficient because they do a better job of limiting administrative overhead; avoiding unnecessary tests, surgeries and other treatments; and releasing patients from the hospital as soon as possible, say CALPIRG researchers.

The report also found that efforts to provide health insurance coverage to the state's 5.1 million uninsured people will be affordable only if they are coupled with strategies to eliminate needless spending.

Source: Keith Darcé, "Report: $1 billion Wasted in California," San Diego Union Tribune, July 10, 2008.


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