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U.S. health-care system wastes add up

Marketplace Staff Oct 26, 2009
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U.S. health-care system wastes add up

Marketplace Staff Oct 26, 2009
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Stacey Vanek-Smith: A report from Thomson Reuters says the U.S. health-care system wastes around $700 billion a year. Ashley Milne Tyte has more.


Ashley Milne-Tyte: According to the report, much of the waste comes from what it calls unnecessary care: the over-prescription of antibiotics and over-use of tests to insure against malpractice claims. Health-care fraud accounts for another big cost — that comes in the form of fake Medicare claims and kickbacks for referrals for unnecessary services among other things.

A hefty amount is wasted on medical mistakes. And the report says billions are spent on preventable conditions — illnesses that could have been treated much more cheaply if the patient had gone to a doctor when their symptoms first started.

Administrative inefficiency and lack of coordination also eat up funds. When health-care providers don’t talk to each other or share medical records, tests tend to get duplicated. Patients get treatment they don’t need or that isn’t right for them. That costs around $25-50 billion a year. All this adds up to a lot of paperwork: the report says the average U.S. hospital spends a quarter of its budget on billing and administration.

I’m Ashley Milne-Tyte for Marketplace.

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