Waste accounts for $850B of healthcare costs annually

Americans could squeeze $600 billion to $850 billion in cost per year out of their healthcare system if they learned how to reduce wasteful spending on care, according to a new research report.

The report, released today by electronic information service company Thomson Reuters, concludes that administrative inefficiency, needless treatment, medical mistakes and fraud account for as much as one-third of the nation's annual health bill. 

The research firm found that unnecessary care, which it defines as overuse of antibiotics and diagnostic tests, accounts for 40 percent of healthcare waste; that administrative inefficiency contributes another 17 percent of costs; that provider errors account for 12 percent of waste; that preventable conditions generate 6 percent of healthcare waste; and that lack of care coordination generates 6 percent of waste.

The report doesn't draw any conclusions that would startle a public health observer, but it never hurts to keep casting a critical eye on such numbers. Seems the Thomson Reuters paper is a reasonable reminder to keep pounding at this issue, which makes good fodder for political speeches, but proves very difficult to address in practice.

To learn more about this report:
- read this Thomson Reuters press release

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