Healthcare Waste by Category

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April 4th, 2013
Categories: Healthcare Reform

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.

Unnecessary Services

  1. Defensive Medicine
  2. Use of high-cost services instead of low cost alternatives
  3. Frequent use 

Excessive Administrative Costs

  1. Duplicated efforts to meet various payer protocols
  2. Unproductive documentation

Inefficiently Delivered Services

  1. Medical Errors
  2. Uncoordinated Care
  3. Inefficient operations

Prices Set Too High

  1. Excessive price variation
  2. Uncompetitive prices

Fraud

  1. Fraudulent Medicare and Medicaid claims
  2. Insufficient detection budgets

Missed Prevention Opportunities

  1. Poor care delivery of preventative services

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healthcare waste