U.S. Health Care System Wastes $750B Annually, Report Finds

More needs to be to done to reduce 'inefficiences,' Institute of Medicine panel says

THURSDAY, Sept. 6, 2012 (HealthDay News) -- About 30 percent of health spending in the United States in 2009 -- about $750 billion -- was wasted on unnecessary services, excessive administration costs, fraud and other problems, a government advisory panel said Thursday.

The report from the Institute of Medicine urges that changes be made to the United States' health care system to reduce costs and improve care.

Institute of Medicine experts added, however, that inefficiency, a vast amount of data and other economic and quality issues obstruct efforts to improve health and threaten the nation's economic stability and global competitiveness, the document warned.

Numerous inefficiencies caused needless suffering. One estimate indicates that about 75,000 deaths might have been prevented in 2005 if every state had delivered health care at the level of the best-performing state.

Gradual upgrades and changes by individual hospitals or health care providers are inadequate to solve the problems, the report committee said.

"Achieving higher-quality care at lower cost will require an across-the-board commitment to transform the U.S. health system into a 'learning' system that continuously improves by systematically capturing and broadly disseminating lessons from every care experience and new research discovery," according to an Institute of Medicine news release.

Solutions include greater use of electronic health records, promoting patient and family involvement in health care decision-making, and quicker adoption of medical breakthroughs.

"It will necessitate embracing new technologies to collect and tap clinical data at the point of care, engaging patients and their families as partners, and establishing greater teamwork and transparency within health care organizations," according to the news release. "Also, incentives and payment systems should emphasize the value and outcomes of care."

The nation has the knowledge and tools to improve the health system so it can provide better quality care at lower cost, the report authors said.

"The threats to Americans' health and economic security are clear and compelling, and it's time to get all hands on deck," report committee chairman Mark Smith, president and CEO of California HealthCare Foundation, said in the news release.

"Our health care system lags in its ability to adapt, affordably meet patients' needs and consistently achieve better outcomes," Smith said. "But we have the know-how and technology to make substantial improvement on costs and quality. Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value."

The Blue Shield of California Foundation, Charina Endowment Fund and Robert Wood Johnson Foundation sponsored the report.

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