The cost of healthcare in the United States is a complex, multi-layered challenge that has vexed the American people and earnest lawmakers in Washington for decades. Inefficiencies, competing corporate interests, and, above all, a lack of transparency contribute to this problem. Making healthcare costs more transparent is a key to unlocking meaningful reforms.
One relatively straightforward form of waste that transparency efforts have helped to uncover is prescription drug waste, which occurs, for example, when a doctor administers pre-packaged, single-use vials of medications through injections or intravenous drips. The dosage required by the patient is frequently less than what is provided in the container. But for safety reasons, unused parts of a single-use vial must be discarded and cannot be used to help another patient.
Providers regularly charge insurers for the cost of the entire vial, rather than the amount used during treatment, and that’s where the waste comes in. A study by Peter B. Bach and colleagues, “Overspending driven by oversized single dose vials of cancer drugs,” published in the British Medical Journal, found that the United States spends $1.8 billion yearly on leftover cancer drugs.
Bach, the director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering in New York City, suggested that drugmakers may be intentionally providing more medicine in their packaging than is required to drive up prices. “(Drug companies) are intimately familiar with the profile of the patients being treated with their drugs,” he writes. “They have detailed knowledge of the average dose based on clinical trials and requirements for FDA approvals. In fact, the drug companies publish recommended dosing. There can be little doubt that they are aware of the waste package sizes tend to generate.”
Another study found that 11 percent of cancer treatment costs came from discarded drugs that never made it into a patient’s arm.
Fortunately, there is a relatively straightforward step that can be taken to eliminate this waste from the system: providers should start using two special billing codes that are already required by Medicare when providing care to patients. These codes help indicate whether part of a drug was wasted or whether the entire quantity of a drug was administered to a patient. While one would assume such commonsense steps are standard practice, they aren’t. This one small change would be a critical first step in addressing rising costs and providing a path forward for enhanced medical billing transparency across the entire healthcare industry.
Reducing prescription drug waste is a win for patients, taxpayers and the healthcare system by driving down costs and reducing health insurance premiums and out-of-pocket costs. Since expenses incurred by Medicare and other government payers eventually trickle down to taxpayers, nearly every American, regardless of health status, stands to benefit from the more efficient use of these costly medications.