October 9, 2019

Waste in US healthcare spending, potential for savings

By: Judy Mathias
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Editor’s Note

This study finds that the estimated cost of waste in the US health care system ranges from $760 billion to $935 billion and accounts for some 25% of healthcare spending.

Projected potential savings from interventions to reduce waste, excluding savings from administrative complexity, range from $191 billion to $282 billion, which represents a potential 25% reduction in the total cost of waste.

These estimates are lower than those provided by the Institute of Medicine’s 2010 report (31%) and by Berwick and Hackbarth’s 2012 report (34%) on “Eliminating waste in US health care,” although those included savings from administrative costs.

These findings highlight the challenges inherent in rapidly changing the course of a healthcare system that accounts for more than $3.8 trillion in annual spending, the authors say.

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