Wasteful spending in the health system has been calculated at up to
$1.2 trillion of the $2.2 trillion spent nationally, more than half of all
• Spending can be classified into three waste “baskets”: behavioral, clinical
and operational. These baskets cross all of the health sectors and include
consumers, government and industry.
• 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 and
overweight ($200 billion annually).
• Eight out of 10 consumers surveyed by PricewaterhouseCoopers’ Health
Research Institute (HRI) said that inefficiency in the healthcare system is
not only driving up healthcare costs, but impacting the quality of care.
• Consumers see themselves, government and the industry at fault for
wasteful spending. For example, 86% of consumers surveyed by HRI
agreed that patients going to emergency rooms for non-emergency care
drives up healthcare costs. Two-thirds said that they personally had
received excessive medical testing.
• When U.S. consumers were asked why they believe the U.S. healthcare
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.
• Key barriers to eliminating waste are culture, politics, funding and
incentives, and lack of a coordinated focus.
• Solving inefficiencies means developing system-wide incentives to
encourage partnerships and networks that work toward shared value.