US Healthcare System Wastes Up to $850bn a Year, Report Says

27 October 2009 (Last Updated October 27th, 2009 18:30)

The US healthcare system wastes between $600bn and $850bn each year, according to a new report. The white paper by Thomson Reuters said administrative inefficiency, unnecessary treatment, medical errors and fraud are the most significant drivers of wasteful spending. Unwarrant

The US healthcare system wastes between $600bn and $850bn each year, according to a new report.

The white paper by Thomson Reuters said administrative inefficiency, unnecessary treatment, medical errors and fraud are the most significant drivers of wasteful spending.

Unwarranted treatment such as the overuse of antibiotics and the use of diagnostic lab tests to protect against malpractice exposure accounts for $250bn to $325bn, the white paper said.

Healthcare fraud, including fraudulent Medicare claims, costs $125bn to $175bn each year, while administrative inefficiencies such as redundant paperwork costs $100bn to $150bn, the report said.

Medical mistakes account for $75bn to $100bn while preventable conditions such as uncontrolled diabetes cost $25bn to $50bn each year to the US healthcare system, according to the report.