A groundbreaking study published in JAMA Health Forum has revealed that the United States federal government’s Medicare program, in conjunction with the older adult population it serves, collectively spends an astonishing $4.4 billion annually on medical services that provide low clinical value. These services, which encompass a range of tests, scans, and procedures, not only fail to benefit many patients but may also pose unnecessary risks of harm. The implications of this research are far-reaching, suggesting substantial opportunities to optimize healthcare spending and improve patient safety within the Medicare system.
The research meticulously analyzed 47 specific medical services shown by rigorous clinical studies to offer minimal or no benefit to most patients. These services, often routine or preventive in nature, have increasingly come under scrutiny as healthcare costs continue to skyrocket. The core argument of the study centers on the need to carefully differentiate which patients genuinely benefit from certain medical interventions and which do not, thereby enabling targeted reductions in unnecessary care. Such a data-driven approach could free up Medicare resources for higher-value care, ensuring more effective allocation of limited funds.
Significantly, the study highlighted that just five particular services account for an estimated $2.6 billion of the total $4.4 billion in potentially avoidable spending. These five services have all been assigned a “D” grade by the U.S. Preventive Services Task Force (USPSTF), indicating that high-quality evidence shows either ineffectiveness or that the potential harms of these interventions outweigh any benefits. This grading is crucial as it empowers the Secretary of Health and Human Services with the regulatory authority, under the Affordable Care Act, to withhold Medicare payments for these services—a powerful policy lever for curbing low-value care.
Among the five targeted interventions are screenings that may seem routine but are problematic in older adults without symptoms or risk factors. These include blanket screening for chronic obstructive pulmonary disease (COPD), bacteria screening in asymptomatic patients’ urine, prostate-specific antigen (PSA) testing in men over 70 absent a relevant history, screening for carotid artery blockages, and electrocardiogram (ECG) screenings for heart rhythm irregularities in symptom-free older adults. The study emphasizes that eliminating the use of these particular screenings in unlikely-to-benefit populations could markedly reduce unnecessary expenditures while avoiding potential iatrogenic harms.
Beyond these primary five, the researchers also cataloged 42 additional services deemed low-value for at least some patient groups. These were identified through comprehensive evaluations by major medical professional societies and other bodies, relying on extensive clinical research. Notably, seventeen of these additional services, combined with three from the USPSTF “D” grade list, collectively represent over 94% of the low-value medical procedures detected in the analysis, illuminating specific focal points for healthcare cost reduction.
The lead authors, health economist Dr. David D. Kim from the University of Chicago and primary care physician Dr. A. Mark Fendrick from the University of Michigan’s Center for Value-Based Insurance Design, undertook this study in response to national priorities aimed at mitigating waste and controlling Medicare’s burgeoning costs. Their analysis utilized anonymized data sourced from a randomized sample of traditional Medicare claims spanning 2018 to 2020, projecting these findings across the entire Medicare population. This robust data-driven methodology strengthens the study’s relevance and reliability in informing future policy decisions.
Dr. Kim underscored the importance of a nuanced approach to reducing low-value care. He noted that while patients who stand to benefit should always have access to necessary procedures, indiscriminate use leads to substantial wasted spending and increased risk exposures. Moreover, the study’s financial estimates do not encompass downstream spending triggered by these low-value interventions, which can be much higher. For example, universal PSA screening has been reported to incur up to six dollars in additional subsequent care for every dollar spent on screening itself, magnifying the economic burden.
Dr. Fendrick pointed out the study’s grounding in clinical evidence distinguishes it from more simplistic cost-cutting measures that might compromise patient outcomes. This patient-centered analysis respects the heterogeneity of clinical scenarios, permitting a more tailored suppression of services unlikely to produce meaningful health improvements. The approach aligns with principles of value-based insurance design, actively encouraged within the framework of the Affordable Care Act, which empowers Medicare to exclude coverage for certain low-value preventive services based on USPSTF grades.
This work has significant policy relevance as it advances beyond blunt expenditure reductions towards smarter, evidence-based healthcare reform. By deploying clinical criteria to guide payment policies, Medicare can potentially achieve savings without jeopardizing care quality—balancing economic sustainability with patient safety. The ability to target reductions specifically to services and patient populations with measurable low value represents a critical evolution in health policy strategy.
The study’s comprehensive list of 47 services, alongside ranking of those most responsible for unnecessary spending, provides a vital resource for stakeholders aiming to refine Medicare’s coverage policies. This detailed catalog is publicly accessible and can inform healthcare providers, insurers, and policymakers alike. For stakeholders concerned about the future viability of Medicare funding, such ledgers offer evidence-based guidance for systematic intervention.
Financially, these findings could steer transformative changes to Medicare spending patterns, potentially unlocking billions in savings that could be reinvested into high-value care areas. As the Medicare population continues to grow and age, optimizing resource allocation is an imperative not only for fiscal stewardship but also for enhancing healthcare outcomes. The study’s authors call on policymakers and healthcare systems to harness clinical evidence as the foundation of value-based insurance policy to realize these gains.
Importantly, the study was funded by Arnold Ventures, a philanthropic organization committed to advancing evidence-based policy, though it maintained no influence over the research. This independence enhances confidence in the objectivity and rigor of the findings. Dr. Kim’s background in biostatistics further attests to the strong analytical underpinnings of the study.
As the healthcare community confronts rising costs and an aging population, this study serves as a clarion call to reevaluate entrenched practices that may do more harm than good. Embracing clinically guided, patient-centered strategies for reducing low-value care could not only preserve vital Medicare funds but also protect patients from unnecessary interventions. This represents a pivotal opportunity to realign healthcare delivery with true value, efficiency, and patient well-being.
Subject of Research: People
Article Title: Projected Savings from Reducing Low-Value Services in Medicare
News Publication Date: 1-Aug-2025
Web References:
- https://jamanetwork.com/journals/jama-health-forum/fullarticle/10.1001/jamahealthforum.2025.3050?utm_source=For_The_Media&utm_medium=referral&utm_campaign=ftm_links&utm_term=080125
- https://www.uspreventiveservicestaskforce.org/uspstf/
- https://vbidcenter.org/initiatives/vbid-in-the-aca/
References: Projected Savings from Reducing Low-Value Services in Medicare, JAMA Health Forum, doi:10.1001/jamahealthforum.2025.3050
Keywords: Health insurance, Economics, Medical economics, Health care costs, Older adults, Preventive medicine, Medical tests, Medical diagnosis
