Humana and the University of Pittsburgh School of Medicine researchers estimate that $760 to $935 billion of healthcare spending is wasteful, indicating a need for value-based care in their opinion.

A new study showed that the US healthcare system still wasted between $760 billion to $935 billion, representing approximately one-quarter of total healthcare spending.

Published in JAMA, the study examined literature from January 2012 to May 2019 that focused on the six waste domains previously identified by the Institute of Medicine and other researchers: failure of care delivery, failure of care coordination, overtreatment or low-value care, pricing failure, fraud and abuse, and administrative complexity.

Researchers from Humana and the University of Pittsburgh School of Medicine estimated wasteful healthcare spending for each of the six domains:

  • Failure of care delivery: $102.4 billion to $165.7 billion
  • Failure of care coordination: $27.2 billion to $78.2 billion
  • Overtreatment or low-value care: $75.7 billion to $101.2 billion
  • Pricing failure: $230.7 billion to $240.5 billion
  • Fraud and abuse: $58.5 billion to $83.9 billion
  • Administrative complexity: $265.6 billion

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