Friday, August 14, 2009

Waste in healthcare, from PWC

PricewaterhouseCooper's Health Research Institute report on wasted healthcare spending

Key findings:

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

health spending.

• 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.

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