Tuesday, May 15, 2012

Waste and healthcare costs

Dr Berwick has written two pieces in which he makes the case that waste broadly defined accounts for 20-30% of US healthcare expenditure. JAMA article requires subscription here and Boston Globe piece here.

He defines waste as follows:

  1. Over-treatment
  2. Failures of care coordination
  3. Failures in execution of care processes
  4. Administrative complexity
  5. Pricing failures, and 
  6. Fraud and abuse
I can certainly see items 1-5 occurring in our system; whether fraud contributes a substantial amount, I just dont have the data. I am guessing failed IT implementation falls into category 4. Interestingly the Vanguard organisation has provided initial estimates based on preliminary work that what they term failure demand (which would certainly fit into category 1-4 above accounts for a very substantial proportion of healthcare activity), for an example see here

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