$4.4 billion in annual spending goes toward tests and procedures offering little to no benefit to older adults
Five services alone account for nearly $2.6 billion in potential savings if eliminated
Experts urge clinically informed reforms over blunt cost-cutting to protect patients and Medicare's future
A new study reveals that Medicare and older adults are spending $4.4 billion a year on medical services that offer low or no clinical value—and, in many cases, pose unnecessary health risks.
Published in JAMA Health Forum, the research focuses on 47 medical services—including tests, scans, and procedures—that experts say are overused in the Medicare population. The study was led by health economist David D. Kim, Ph.D. of the University of Chicago and primary care physician A. Mark Fendrick, M.D. of the University of Michigan’s Center for Value-Based Insurance Design.
Five risky services cost billions
Just five of the 47 services account for $2.6 billion in potentially avoidable spending. All five have received a “D” grade from the U.S. Preventive Services Task Force (USPSTF), meaning their harms outweigh their benefits. Under the Affordable Care Act, Medicare is authorized to deny payment for such services.
The five low-value services are:
Screening all older adults for chronic obstructive pulmonary disease (COPD)
Screening for asymptomatic urinary tract bacteria
Prostate-specific antigen (PSA) testing in men over 70 without prostate issues
Carotid artery blockage screening in symptom-free older adults
Electrocardiogram screening for heart rhythm issues in asymptomatic older adults
“These are services where the risks often outweigh the potential benefits, particularly for older adults without symptoms,” said Dr. Kim. “Avoiding them when they are unnecessary could save Medicare billions.”
94% of costs concentrated in 20 services
The researchers also analyzed 42 other services flagged by professional medical societies as low-value in certain patient groups. Just 20 of the 47 total services accounted for 94% of all unnecessary spending during the 2018–2020 period.
The study was based on anonymized data from traditional Medicare claims, extrapolated to reflect the national Medicare population. It did not include the “downstream” costs—such as additional care resulting from unnecessary tests—which could vastly increase the overall waste. For example, prior research found that for every $1 spent on PSA screening, $6 in follow-up costs ensue.
Smarter cuts, not blunt ones
Rather than advocating across-the-board cuts, the study’s authors argue for targeted, evidence-based decisions. “This is much more nuanced than ‘blunt’ policies that reduce government spending on health care but could harm patients,” said Dr. Fendrick.
The Affordable Care Act already provides mechanisms to curtail low-value services, but the authors emphasize that smarter policy guided by clinical nuance and patient need is key to preserving both patient safety and Medicare’s sustainability.
“Patients who can benefit from these services should absolutely receive them,” said Kim. “But tremendous savings can be achieved by avoiding them in those who won’t.”