What Causes $1.2 Trillion Of Healthcare Waste?

We all know there’s plenty of waste in American health care, but does $1.2 trillion — more than half of annual spending — really go down the drain? Looks that way.

A new report from consultancy PricewaterhouseCoopers identifies how the $1.2 trillion in annual waste breaks down. CNNMoney.com identifies six areas totaling nearly $500 billion that stand out as issues to be dealt with in the health care reform debate:

  • Too many tests — $210 billion a year wasted
  • Inefficient claim processing — $210 billion
  • Using the ER as a clinic —  $14 billion
  • Medical errors — $17 billion
  • Discharged patients too soon — $25 billion
  • Infections from hospital stays — $3 billion

Other areas of waste mentioned in the report are “up to $493 billion related to risky behaviour such as smoking, obesity and alcohol abuse, $21 billion in staffing turnover, $4 billion in prescriptions written on paper, and $1 billion in the over-prescribing of antibiotics.”

It’s easier to identify waste, of course, than to figure out how to eliminate it. Don’t worry, Washington will figure all that out.

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