Is it Possible to Waste $935 Billion Dollars in America?
Sadly, America is No. 1 again. Yep, we have, hands down, the most expensive healthcare in the world. But maybe it wouldn't be that way if we didn't waste as much as a quarter of all medical spending - a figure that could be as high as $935 billion per year! That's according to a new study from researchers at Humana, a for-profit American health insurance company. The study, published in JAMA, is based on government reports, articles and peer-reviewed publications related to costs and savings estimates in six categories of waste released between 2012 and 2019.
As much as $265.6 billion is wasted on what they call "administrative complexity"- which includes the time physicians spend reporting on quality measures, in addition to billing and coding waste.
Another $240.5 billion of waste can be attributed to "pricing failure," or price increases that far exceed those expected in a well-functioning market.
As much as $165.7 billion is related to "failure of care delivery," poor execution or lack of widespread adoption of best care processes.
Fraud and abuse takes up another $83.9 billion each year, while up to $101.2 billion is spent on overtreatment or low-value care.
An additional estimated $78.2 billion goes toward unnecessary admissions or avoidable complications and readmissions-categorized as "failure of care coordination."
Meanwhile, the average American is currently stuck dolling out $9,892 per person each year. That's 25 percent higher than the average Swiss person ($7,919), with the second-highest healthcare costs, and more than twice the amount spent by the average American in 2000, which was $4,559 when accounting for inflation.