Wasted Health Spending: Who’s Picking Up The Tab?

The Institute of Medicine estimated that waste consumed 30 percent of US health dollars in 2009. Donald M. Berwick and Andrew D. Hackbarth, working from a 2011 baseline, pegged the midpoint of reasonable waste estimates even higher, at 34 percent. A crude extrapolation of these figures, given the steady rise in overall health expenditures, implies that wasted spending now comfortably exceeds $1 trillion annually (see Exhibit 1), a sum that could fund the entire Medicaid program twice over.

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