US Health Care Wastes $700B a Year
A third of spending is lost to pointless treatment, paperwork, fraud
By Jason Farago,  Newser Staff
Posted Oct 26, 2009 5:53 AM CDT
Dr. Pedro Jose Greer examines Medicaid patient Kenneth Caldwell, 50, in his office at Mercy Hospital in Miami.   (AP Photo/Lynne Sladky)
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(Newser) – A study by Thomson Reuters released today confirms President Obama's contention that the American health care system is hemorrhaging billions of dollars a year, with one-third of the cost of care wasted on inefficiency, mistakes, and fraud. The report, which cites dozens of research papers, finds that about $700 billion is misspent each year, 37% of which is attributed to overuse of antibiotics and tests to avoid malpractice exposure.

Another 22% of waste is sucked up by kickbacks, fraudulent Medicare claims, or other scams. Inefficiencies, such as a paper-based records system, account for 18% of the waste, and medical mistakes 11%. "The opportunities to slow the fiscal bleeding are substantial," said the head researcher. "We can reduce health care costs without adversely affecting the quality of care or access to care."