The estimated cost of waste in the U.S. health care system ranges from $760 billion to $935 billion, accounting for approximately 25 percent of total health care spending, according to an analysis by William H. Shrank, MD, MSHS; Teresa L. Rogstad, MPH; and Natasha Parekh, MD, MS. However, the report, published Oct. 7 in the Journal of the American Medical Association, also suggests that interventions to reduce waste could save anywhere from of $191 billion to $282 billion and reduce the total costs of waste by 25 percent.

With the U.S. spending more on health care than any other country (roughly 18 percent of the gross domestic product), Shrank and colleagues set out to estimate current costs of waste. They conducted a review of literature from January 2012 to May 2019 focusing on the six waste domains identified by the Institute of Medicine: 1) failure of care delivery; 2) failure of care coordination; 3) overtreatment or low-value care; 4) pricing failure; 5) fraud and abuse; and 6) administrative complexity.

Findings from the review found administrative complexity ($265.6 billion), pricing failure ($230.7 billion to $240.5 billion), and failure of care delivery ($102.4 billion to $165.7 billion) to be the largest sources of waste costs, followed by overtreatment or low-value care ($75.7 billion to $101.2 billion), fraud and abuse ($58.5 billion to $83.9 billion), and failure of care coordination ($27.2 billion to $78.2 billion). The greatest savings from interventions to eliminate waste were estimated in the areas of pricing failure ($81.4 billion to $91.2 billion) and failure of care delivery ($44.4 billion to $93.3 billion). Cost-saving interventions in the domains of failure of care coordination, overtreatment or low-value care and fraud and abuse were estimated at $29.6 billion to $38.2billion, $12.8 billion to $28.6 billion, and $22.8 billion to $30.8 billion, respectively.

Shrank and colleagues noted that while the administrative complexity category was associated with the greatest contribution to waste, "there were no generalizable studies that had targeted administrative complexity as a source for waste reduction." They suggest that enhanced collaboration between payers, health systems and clinicians around valued-based payment models may be one of the biggest opportunities to reduce waste in this category.

In a related editorial, Karen E. Joynt Maddox, MD, MPH, FACC, and Mark B. McClellan, MD, PhD, write that the "current piecemeal approach, which imposes complexity and additional implementation costs on clinicians, hospitals and health systems, should evolve to a simpler and more holistic approach to value-based payment." They provide more detailed suggestions for how primary care, specialty care and hospital care should be structured for success and highlight that any approach moving forward should integrate "strategies that have shown promise across payers and programs, with more engagement and leadership from the clinical community so that they can be implemented fully and improved along the way."

Donald M. Berwick, MD, MPP, in his own editorial, adds that "some of this physicians cannot change, but much they can." He calls on physicians to "act with strong voices and political courage to openly opposes greed and deception pricing policies where they arise." He also writes that "the challenge of removing waste from U.S. health care and reinvesting the harvest where it could do much more good is not a technical one. It is a political one. In short, removing waste from U.S. health care will require both awakening a sleepy status quo and shifting power to wrest it from the grip of greed."

Enter ACC Advocacy efforts. "Reducing administrative burden, promoting practice stability and patient access to affordable care, and leading the transition to improved care models that strengthen value and patient outcomes are among the top health policy priorities for the ACC," says ACC Health Affairs Committee Chair Thad F. Waites, MD, MACC. "The College has long been an advocate – as well as a convener – of stakeholders ranging from clinicians to payers to the government working to reduce unnecessary health care costs through application of appropriate use criteria, developing tools and resources to help members participate in value-based care, and more. We are not only heeding, but helping to lead the call to action."

Keywords: ACC Advocacy, American Medical Association, National Academy of Sciences, U.S., Gross Domestic Product, Leadership, Deception, Cost Savings, Delivery of Health Care, Health Care Costs, Health Resources, Fraud, Health Policy, Primary Health Care, Government

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