Wasteful Medical Spending Clogs Health Care Industry

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CNN: "Consider this: For every dollar the nation spends on health care, 50 cents is wasted. According to a 2008 report by Pricewaterhouse Cooper's Health Research Institute, wasteful spending accounts for $1.2 trillion of the $2.2 trillion spent on health care in the United States." CNN says the waste includes "costs associated with inefficient insurance claims processing, defensive medicine, preventable hospital readmissions, medical errors, and unnecessary emergency room visits." Cindy Holtzman, a consumer advocate with Medical Billing Advocates of America, "looks at medical bills for a living" and often finds erroneous bills that insurers pay anyway. 'Usually any kind of bill that's under $100,000, they don't look at the details. And that's where something like that can be paid in error,' she said."

But "[e]xpensive charges aren't always a mistake. Rich Umbdenstock, president and CEO of the American Hospital Association, says hospitals mark up prices on medical bills to make up for lower payments the government pays through Medicare and Medicaid" (Bonifield, 3/3).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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