Do Doctors Waste Healthcare Dollars?


Which would you prefer; overtreatment or undertreatment? That’s the fundamental question behind a recent Harvard study.

Peter Ubel, writing in Forbes, tells us that American physicians dole out lots of unnecessary medical care to their patients. He says they prescribe unnecessary antibiotics for people with viral infections, order expensive CT scans and MRIs for patients with “transitory back pain”, and obtain screening EKGs for people with no signs or symptoms of heart disease.

Several allegations have been made against doctors to explain this:

  • More tests and treatment are ordered for private (wealthier) patients than for those on Medicaid and those without insurance.
  • Physicians order unnecessary tests and treatment to bolster their incomes.
  • Physicians order fewer tests and treatment for people who cannot pay.


A Harvard study recently tested these hypotheses. Michael Barnett and his colleagues researched how often patients received “unnecessary services.” They compared patients with private insurance to those with Medicaid and also those without any insurance.

Study Results

The results may surprise you. They certainly surprised Peter Ubel. Here is a summary:

  • Almost 20% of private insurance patients receive “unnecessary services.”
  • Almost 20% of Medicaid patients receive “unnecessary services.”
  • Almost 20% of the uninsured receive “unnecessary services.”

In other words, doctors treat people the same regardless of their type of insurance – or lack of insurance! Would we want it any other way?

Ubel believes this is disturbing because he says, “In short, there’s way too much wasteful care, regardless of what kind of insurance people have or don’t have.”

The study did note some variations in the type of “unnecessary services” received by insurance coverage. Private insured and Medicaid patients received “unnecessary antibiotics” for respiratory infections about half the time while this happened to three-quarters of the uninsured. Narcotics were prescribed for back and neck pain more often for the uninsured (almost 50%) but only 33% for Medicaid and 25% for private insurance.

Ubel, who is an academic physician at Duke University, guesses at explanations for these findings:

  • When ordering tests like EKGs, physicians operate “out of habit.”
  • Patients are “powerless” and don’t push back when doctors order “unnecessary services.”
  • Contingency antibiotics – they order these more often for patients they don’t know (and can’t rely on to return) than well-established patients
  • Narcotic insanity – he has no idea how to explain these findings
  • There is no evidence of physician greed in these findings.


Ubel says he would be eager to hear the thoughts of clinicians who care for these populations to hear their explanations. Here are mine:

  • “Unnecessary services” is very subjective and good doctors can easily disagree on what is unnecessary.
  • Most “unnecessary services” are ordered out of an abundance of caution to avoid unnecessary complications. Would you rather have undertreatment?
  • Our litigious culture demands doctors protect themselves from malpractice claims by an abundance of caution. No one is suited for overtreatment or too many tests.
  • While overtreatment may increase costs and have deleterious effects on the nation as a whole, it rarely adversely affects individual patients. Unnecessary antibiotics do lead to antibiotic-resistant organisms.
  • The uninsured usually represent a more transient, sicker population that warrants overtreatment when follow-up is unreliable.
  • Patients are not powerless. If they can’t afford treatment or tests they usually don’t get them.
  • Medicaid patients and the uninsured generally demand narcotics more often than the privately insured population. Both populations are frequented by those who abuse narcotics or sell them or both. (see Medicaid and the Opioid Crisis Medicaid and the Killer Drugs)


Hospital Waste

Wasteful healthcare spending is more of a problem when considering the difference between private physicians and those who are employed by hospitals. There is an alarming trend toward hospitals acquiring private physician practices because they can charge more for the same services. These physicians are often subjected to quotas that incentivize their treatment decisions.

Therefore, it is no surprise to me that Mr. Ubel also references another study in the Journal of the American Medical Association Internal Medicine that drew the following conclusions:

“Visits to US hospital-based practices are associated with greater use of low-value computed tomography and magnetic resonance imaging, radiographs, and specialty referrals than visits to community-based practices, and visits to hospital-owned community-based practices had more specialty referrals than visits to physician-owned community-based practices. These findings raise concerns about the provision of low-value care (unnecessary) at hospital-associated primary care practices.

One comment

  1. Another great and factual article.

    Comment by David R. Godfrey on February 15, 2018 at 6:10 pm