More than Half of $2.2T US Health Tab Called Wasteful

April 14, 2008 ( - More than half of the nation's $2.2-trillion health care spending is wasteful, according to a new PricewaterhouseCoopers' Health Research Institute study.
The study found the top three areas of wasted spending are defensive medicine ($210 billion annually), inefficient claims processing (up to $210 billion annually), and care spent on preventable conditions related to obesity ($200 billion annually). The study report said the $1.2 trillion in waste, defined in the research as costs that could have been avoided without hurting service quality, has to be dealt with at a macro level because targeted cost-cutting leaves inefficiencies in other parts of the health system.

“To appropriately address waste in health spending, health industry leaders, policymakers and consumers must work together on systemwide goals and incentives to address the waste that imperils the health of us all,” PwC researchers wrote. “…Wasteful spending extends beyond one organization or health sector, and eliminating waste in one sector may actually increase it in another.”

Other findings, according to the report, included:

  • Key barriers to eliminating waste are culture, politics, funding and incentives, and lack of a coordinated focus.
  • Eight out of 10 consumers said that inefficiency in the health care system is not only driving up health care costs, but impacting the quality of care.
  • Consumers see themselves, government, and the industry at fault for wasteful spending.
  • When U.S. consumers were asked why they believe the U.S. health care system has inefficiencies that have not been resolved, nearly half said “because it is not a priority for the government.” More than a third said it was due to the health industry not being willing to change business practices.

The report is available here . A free registration is required.