Health care spending is projected to grow at an average annual rate of 5.6 percent over the next decade. This will result in 20 percent of our gross domestic product – or $1 out of every $5 – going to medical services by 2025, displacing funding for other societal priorities such as education, the environment and national defense.

But expensive big-ticket items alone, like blockbuster cancer drugs or cutting-edge technologies, are not escalating our nation’s medical spending. Far more insidious is something lurking in every hospital in America: waste. Health care waste, primarily in the form of physician-ordered, unneeded tests and treatments, costs approximately $765 billion annually, and comprises 30 percent of total health care spending. Recent actions by the Trump administration will likely only make the problem worse.

The fact that up to 30 percent of medical care may be unnecessary is not a new finding, but recent reports bring a renewed call to confront a health care system that faces an epidemic of unnecessary services. The trick, of course, is to figure out which services are needed and which are not. One idea taking hold is to change how we pay health care providers, by moving from paying for everything we do, regardless of its necessity, to paying for services that are appropriate and target better health outcomes. In medical jargon, this is called “value-based care” and represents a standardized approach emphasizing best medical practices with a focus on quality and patient safety.

Despite the urgent need to address this long-standing problem of medical waste, changing the way physicians provide care is an uphill battle because the culture of medical practice begins early in medical training. At its core, traditional medical training emphasizes thoroughness over appropriateness. Medical students are taught to consider every possible diagnosis and utilize all tests and technologies at their disposal, an approach that is poorly adapted to our rapidly expanding menu of testing options, and comes amid demands for more services from patients who conflate “more” with “better.” The fact that patients can be harmed by too much care is commonly overshadowed by fears of doing too little.

Few residency training programs provide formal instruction on value-based care, and too few supervising physicians are effective role models in moving toward cost-conscious behaviors. For example, a number of studies have found routine and repetitive daily laboratory testing of clinically stable hospitalized patients, a practice prevalent across the country, unnecessary, saying it can lead to hospital-acquired anemia, increased costs and unnecessary downstream testing and procedures. Yet these unnecessary and costly tests continue despite recent evidence that efforts to reduce them can improve patient satisfaction and reduce cost without negatively affecting patient outcomes.

Another contributing factor to the culture of medical waste is physician anxiety caused by uncertainty in diagnosing patients’ medical conditions. This uncertainty generally leads to more testing and higher charges. Improved training in clinical reasoning could reduce both uncertainty and overtesting, but, as a recent survey found, many medical students receive limited training on clinical reasoning concepts and skills, potentially setting them up for diagnostic missteps and further unnecessary testing.

Fortunately, positive change is afoot. Multiple physicians and medical organizations are working to challenge long-held beliefs about what constitutes value. Some examples include the Choosing Wisely campaign, initiated by the American Board of Internal Medicine and now celebrating five years of success, which codifies low-value services and aims to promote dialogue between patients and doctors about unnecessary testing. Costs of Care is a nongovernmental collaborative working with health care professionals to raise awareness and promote behavior to deliver the best health care at the lowest cost. The Society to Improve Diagnosis in Medicine is a growing organization working in partnership with patients and the health care community to improve the diagnostic process and eliminate harm. The High-Value Practice Academic Alliance, a coalition of 90 academic medical centers, has a mission to lead widespread and lasting improvements in health care value through collaborative quality improvement, education and research. While incremental, these efforts are important and demonstrate that physicians can be trained to avoid overuse without sacrificing appropriate patient care.

Policymakers, however, must do their part. Despite advances in medical education, physicians in practice settings are still generally rewarded under the current fee-for-service reimbursement system for doing more rather than less. Fee-for-service payments reimburse for whatever is done – tests, procedures, hospital stays – with little regard for coordinating care or improving patient outcomes. The Affordable Care Act provides funding for experiments in alternative physician payment methodologies, most notably in the Medicare population, using prepaid “bundled payments” to reverse the financial incentive to simply do more. Under these types of bundled payment arrangements, health care providers are rewarded for care coordination and for keeping patients healthy and out of the hospital, where 30 percent of all health care spending occurs. There is evidence that the programs are working: Four federal programs saved a combined $836 million in Medicare spending last year.

Unfortunately, the Trump administration is slowing the shift to alternative payment models. Last August, the Department of Health and Human Services announced plans to scale back bundled payments in joint replacement and cardiac care. This is bad news for both patients and their doctors. Patients will continue to receive too many bills detailing multiple services they receive and may not need, and doctors and hospitals will continue working in a culture of waste that rewards redundant tests and unnecessary referrals. Many health care experts believe that these actions create barriers to the rollout of innovative payment models and instead move health financing backwards by re-embracing the old fee-for-service paradigm.

Hospitals, still operating in a world that is mostly fee-for-service, cannot be expected to altruistically turn away payments that reward them for providing all available services to patients. It will take a large-scale value-based payment initiative through a predominant payer such as Medicare to nudge hospitals to provide fewer low-value services. Until policymakers act, however, more can and should be done by the medical community itself. Medical education must expand their teaching to include clinical reasoning and “just in time” strategies to better diagnose complex patients, particularly in primary care, where 1 in 5 preliminary diagnoses are often wrong. If we want to break the cycle of overuse, we must give clinicians the tools they need to better appraise the evidence and offer the right treatment for the right patient at the right time. This will require changing the culture of medicine from one of waste and unnecessary care to one where the emphasis is on doing more for the patient and less to the patient.

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