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Landmark reports from reputable sources have concluded that the United States wastes hundreds of billions of dollars every year on medical care that does not improve health outcomes. While there is widespread agreement over how wasteful medical care spending is defined, there is no consensus on its magnitude or categories. A shared understanding of the magnitude and components of the issue may aid in systematically reducing wasteful spending and creating opportunities for these funds to improve public health.
To this end, we performed a review and crosswalk analysis of the literature to retrieve comprehensive estimates of wasteful medical care spending. We abstracted each source's definitions, categories of waste, and associated dollar amounts. We synthesized and reclassified waste into 6 categories: clinical inefficiencies, missed prevention opportunities, overuse, administrative waste, excessive prices, and fraud and abuse.
Aggregate estimates of waste varied from $600 billion to more than $1.9 trillion per year, or roughly $1800 to $5700 per person per year. Wider recognition by public health stakeholders of the human and economic costs of medical waste has the potential to catalyze health system transformation. (Am J Public Health. 2020;110:17431748. https://doi.org/102105/AJPH. 2020.305865)
In 2018, national health expenditures in the United States grew to $3.6 trillion, nearly 18% of the gross domestic product.1 The United States spends nearly twice as much per capita as other high-income countries,2 but mounting evidence demonstrates that a significant amount of US medical care spending does little or nothing to improve population health outcomes and is therefore wasteful.
In 2009, the Institute of Medicine (since renamed and now part of the National Academies of Sciences, Engineering, and Medicine [NASEM]) Roundtable on Value and ScienceDriven Health Care convened a 4-part workshop series to examine the major causes of excess medical care spending, waste, and inefficiency in the United States.3 According to findings from these workshops, the lower-bound totals of estimates of excess expenditures amounted to $765 billion in 2009 ($879 billion in 2019 dollars; note that all subsequent amounts are in 2019 dollars unless otherwise noted) or 30% of national health expenditures. A separate analysis by Berwick and Hackbarth in 2012 estimated that the range of annual medical care waste was between 21% and 47% of national health expenditures.4 Extrapolating Berwick and Hackbarth's estimates using...