The amount of healthcare waste totaled $765 billion and 30% of the $2.5 trillion spent on healthcare delivery in 2009. The Institute of Medicine categorized waste into six general categories, from excessive administrative costs to unnecessary services.
There are multiple driving factors for all areas of healthcare waste. The six categories comprising healthcare waste are listed along with each category’s driving factors.
- Defensive Medicine
- Use of high-cost services instead of low cost alternatives
- Frequent use
Excessive Administrative Costs
- Duplicated efforts to meet various payer protocols
- Unproductive documentation
Inefficiently Delivered Services
- Medical Errors
- Uncoordinated Care
- Inefficient operations
Prices Set Too High
- Excessive price variation
- Uncompetitive prices
- Fraudulent Medicare and Medicaid claims
- Insufficient detection budgets
Missed Prevention Opportunities
- Poor care delivery of preventative services
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