Study: 20% of U.S. healthcare wasted

April 11, 2012 at 10:10 PM

SANTA MONICA, Calif., April 11 (UPI) -- Twenty percent of the more than $2.2 trillion spent on healthcare in the United States each year is wasted, two healthcare experts suggest.

Dr. Donald Berwick, former administrator of the Centers for Medicare & Medicaid Services, part of the U.S. Department of Health and Human Services, and chief executive officer of the Institute for Healthcare Improvement, and Andrew Hackbarth, a policy analyst for the RAND Corp., said the waste was in six areas.

The six categories of healthcare waste were:

-- Over treatment.

-- Failures of care coordination.

-- Failures in execution of care processes.

-- Administrative complexity.

-- Pricing failures.

-- Fraud and abuse.

The six areas represent enormous opportunities for cost-cutting and improvement, but the actual total might be far greater, they say.

"The savings potentially achievable from systematic, comprehensive and cooperative pursuit of even a fractional reduction in waste are far higher than from more direct and blunter cuts in care and coverage," Berwick said in a statement.

"The need is urgent to bring U.S. healthcare costs into a sustainable range for both public and private payers. Commonly, programs to contain costs use cuts, such as reductions in payment levels, benefit structures and eligibility. A less harmful strategy would reduce waste, not value-added care. The opportunity is immense."

The findings were published in the Journal of the American Medical Association.

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