Quantifying healthcare’s waste

I thought readers of this blog might be interested to see some hard numbers that Thomson Reuters released earlier this week about the amount of waste present in the healthcare industry. According to a new white paper, the healthcare industry wastes between $600 billion and $850 billion each year. Here are the areas that were identified as the causes of waste:

• Unnecessary care (40%)
• Fraud (19%)
• Administrative Inefficiency (17%)
• Healthcare provider errors (12%)
• Preventable conditions (6%)
• Lack of care coordination(6%)

You can find the full descriptions of the bulleted list by clicking here. What struck me most about the list is the order–based on what I hear in the industry and even on mainstream media news reports, I would think that healthcare provider errors, preventable conditions, and lack of care coordination would account for a larger share of the waste. It’s not often that I hear of  fraud or administrative inefficiency as areas where lots of waste exists.

What about you, does this jive with your perceptions of where healthcare could tighten up? $650 billion to $850 billion annually is a lot to flush down the drain. What has your facility done to address this?