US Healthcare System Wastes $800billion a Year.

WASHINGTON (Reuters) October 25, 2009 “ The United States' healthcare system wastes between $505 billion and $850 billion every year, according to a Thomson Reuters report released on Monday. Yes thats BILLION, a third of the US' annual healthcare spending.

"America's healthcare system is indeed hemorrhaging billions of dollars, and the opportunities to slow the fiscal bleeding are substantial," the report reads.

"The bad news is that an estimated $700 billion is wasted annually. That's one-third of the nation's healthcare bill," Robert Kelley, vice president of healthcare analytics at Thomson Reuters said in a statement.

Where does the wasted $800billion go?

• Paper based records sharing discouraging information sharing - 6%

• Unneccessary care, overuse of antibiotics and lab tests ~ $200-$300billion (37%.)
• Fraud and kickbacks and referrals ~ up to $200 billion (22%.)
• Administrative innefficiency - 18%.
• Medical mistakes ~ $50 billion to $100 billion (11%.)
• Preventable conditions such as uncontrolled diabetes costs $30-50 billion a year.

"The average U.S. hospital spends one-quarter of its budget on billing and administration, nearly twice the average in Canada," reads the report, citing dozens of other research papers.

"American physicians spend nearly eight hours per week on paperwork and employ 1.66 clerical workers per doctor, far more than in Canada," it says, quoting a 2003 New England Journal of Medicine paper by Harvard University researcher Dr. Steffie Woolhandler.

Yet primary care doctors are lacking, forcing wasteful use of emergency rooms, for instance, the report reads.

All this helps explain why Americans spend more per capita and the highest percentage of GDP on healthcare than any other OECD country, yet has an unhealthier population with more diabetes, obesity and heart disease and higher rates of neonatal births than other developed nations.

"The good news is that by attacking waste we can reduce healthcare costs without adversely affecting the quality of care or access to care," according to Kelley.

Source: Reuters

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