More sensible spending on tests and treatments could take a big bite, perhaps as much as 20 to 30 percent, out of the growing U.S. health-care tab while maintaining or even improving the quality of care, according to the Dartmouth researchers. That savings could help hold down health-care costs for the insured and be used to fund coverage for the tens of millions of Americans who are uninsured or underinsured.

Consumers Union, the nonprofit publisher of Consumer Reports, recommends these policy actions:

Stop rewarding mistakes. Some steps are already being taken. For instance, Medicare will soon stop paying for most treatment of bedsores, hospital infections, and other problems that could be avoided but afflict patients who were originally hospitalized for some other condition. Under current practice, hospitals actually make money from treating their own mistakes.

Encourage primary care. Fewer medical-school graduates are going into primary care because they can make much more money as specialists, no small consideration when faced with paying off six-figure student loans. Medicare is currently studying paying primary-care doctors extra for functioning as a "medical home" for patients, helping to manage their chronic ailments and coordinating care provided by specialists.

Find out what really works. The government should fund more research comparing different treatments for common conditions, and then scale reimbursements to encourage the use of the most effective care. That would help discourage the unnecessary treatments and tests found in high-spending regions.