Elusive Waste

“Health care in the United States has its own version of the Fermi paradox. It involves the strong evidence of massive waste that is updated in the Special Communication by Shrank and colleagues in this issue of JAMA. The authors recalculate the proportion of US health care expenditures that is waste. Their estimates, which they suggest are conservative, are similar to other major reports of the past decade, which came up with median estimates of waste amounting to 30% to 35% of total health expenditures. Shrank and colleagues estimated that waste represents 20% to 25% of US health care expenditures, but they explicitly did not include some extrapolations from Medicare data to the population at large. The authors further reviewed the literature on efforts to reduce waste, which, they claim, suggests that about 25% of that amount—approximately 5% of total health care spending—could be reduced with implementation of well-documented, current programs.

-Donald M. Berwick, “Elusive Waste: The Fermi Paradox in US Health Care.” JAMA. Octover 7, 2019.