US healthcare wastes up to $800
billion a year
WASHINGTON – As much as one-third
of the money spent on healthcare in the United States is wasted as a
result of inefficiencies, medical error and fraud, according to a
Thomson Reuters study that was released in October.
The U.S. healthcare system wastes between $505 billion and $850 billion
every year, the report from Robert Kelley, vice president of healthcare
analytics at Thomson Reuters, found.
“America’s healthcare system is indeed haemorrhaging billions of
dollars, and the opportunities to slow the fiscal bleeding are
substantial,” the report reads. “The bad news is that an estimated $700
billion is wasted annually. That’s
one-third of the nation’s healthcare bill,” Kelley said in a statement.
“The good news is that by attacking waste we can reduce healthcare costs
without adversely affecting the quality of care or access to care.” One
example – a paper-based system that discourages sharing of medical
records accounts for 6 percent of annual overspending.
“It is waste when caregivers duplicate tests because results recorded in
a patient’s record with one provider are not available to another or
when medical staff provides inappropriate treatment because relevant
history of previous treatment cannot be accessed,” the report reads.
Some other findings in the report from Thomson Reuters, the parent
company of Reuters:
• Unnecessary care such as the overuse of antibiotics and lab tests to
protect against malpractice exposure makes up 37 percent of healthcare
waste or $200 to $300 billion a year.
• Fraud makes up 22 percent of healthcare waste, or up to $200 billion a
year in fraudulent Medicare claims, kickbacks for referrals for
unnecessary services and other scams.
• Administrative inefficiency and redundant paperwork account for 18
percent of healthcare waste.
• Medical mistakes account for $50 billion to $100 billion in
unnecessary spending each year, or 11 percent of the total.
• Preventable conditions such as uncontrolled diabetes cost $30 billion
to $50 billion a year.
• “The average U.S. hospital spends one-quarter of its budget on billing
and administration, nearly twice the average in Canada,” reads the
report, citing dozens of other research papers.
“American physicians spend nearly eight hours per week on paperwork and
employ 1.66 clerical workers per doctor, far more than in Canada,” it
says, quoting a 2003 New England Journal of Medicine paper by Harvard
University researcher Dr. Steffie Woolhandler.
Posted November 12, 2009