Study: Up to $935B spent on healthcare in U.S. may be wasted

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Oct. 7 (UPI) — The Journal of the American Medical Association said Monday that roughly one quarter of total health care spending in the United States is wasted each year.

Total U.S. healthcare expenditures have been projected to be $3.82 trillion this year, the JAMA report said, finding that waste in the U.S. healthcare system consumes $760 billion to $935 billion annually.

The findings, culled from seven years of peer-reviewed research and other data, focus on six forms of waste, including failure of care delivery, failure of care coordination, over-treatment or low-value care, pricing failure, fraud and abuse, and administrative complexity.

Researchers found that administrative complexity consumed the most waste, costing $265.6 billion. Pricing failure was the second highest cost of waste at up to $240.5 billion.

Among other categories, failure of care delivery costs up to $165.7 billion, failure of care coordination costs up to $78.2 billion, over-treatment or low value care cost up to $101.2 billion, and fraud and abuse up to $83.9 billion.

The potential savings identified by researchers from waste interventions across several categories, excluding administrative complexity, was up to $282 billion, representing a 25 percent reduction in the total cost of waste.

Though administrative complexity was the biggest source of waste, “there were no generalizable studies that targeted administrative complexity as a source for waste reduction,” the report noted.

“The United States spends more on health care than any other country,” the report also noted, with costs nearing 18 percent of the gross domestic product.

Previous studies have estimated the total cost of waste in healthcare is about 30 percent of total spending.


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