The future of health care in the United States cannot look good as long as we waste so much of what we spend. I have long cited studies showing that we waste 30%-40% of our health care dollar, and have long claimed that we could beat that and reduce our costs by 50%, cover everyone, and have better quality at the same time. Now Thomson Reuters health care analyst Robert Kelley has pulled together a plethora of substantial studies to produce a white paper headlined, "Where Can $700 Billion in Waste be Cut Annually From The U.S. Healthcare System?," detailing what various studies show about where the waste shows up.
He divides the waste into six categories:
- Unnecessary care : 40% of the total waste ($250 – $325 billion in annual healthcare spending)
- Fraud: 19% ($125 – $175 billion)
- Administrative inefficiency: 17% ($100 – $150 billion)
- Provider errors and inefficiencies: 12% ($75 – $100 billion)
- Preventable conditions: 6% ($25 – $50 billion)
- Lack of care coordination: 6% ($25 – $50 billion)
Meanwhile, the Washington Post publishes a roundup of health care experts seconding what I said two months ago: The bills before Congress are way too cautious about making the real changes that will truly cut health care costs to match the rhetoric about affordability. I warned about this in my post, "'Reform' means higher costs, not lower" and then proposed "Driving down the cost of health care: What would actually work?"