Study: Health Care System Wasting $750 Billion A Year In Unnecessary Costs

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The Pew study showed that these Americans are afflicted with chronic conditions such as diabetes, heart disease, high blood pressure or cancer -- and many are diagnosing themselves through the Internet. (credit: Andreas Rentz/Getty Images)

The Pew study showed that these Americans are afflicted with chronic conditions such as diabetes, heart disease, high blood pressure or cancer — and many are diagnosing themselves through the Internet. (credit: Andreas Rentz/Getty Images)

CBS DC (con't)

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WASHINGTON (CBSDC) — A recent study finds that the health care system is wasting $750 billion a year in unnecessary costs.

A report put out by the Institute of Medicine found that 30 percent of all health care spending in 2009 was wasted on unnecessary services, administrative costs and fraud.

“The threats to Americans’ health and economic security are clear and compelling, and it’s time to get all hands on deck,” Mark D. Smith, president and CEO of the California HealthCare Foundation, Oakland, said in a press release. “Our health care system lags in its ability to adapt, affordably meet patients’ needs, and consistently achieve better outcomes.”

The study also found that 75,000 deaths could have been averted in 2005 “if every state had delivered care at the quality level of the best performing state.”

The Institute of Medicine calls on the Department of Health and Human Services to encourage health care professionals to collect data in digital formats and also expand access to health care data records.

The panel also calls for new payment models being devised since the costs of health care have increased at a greater rate than the economy as a whole for 31 over the past 40 years, according to the report.

“The entrenched challenges of the U.S. health care system demand a transformed approach,” the report states. “Left unchanged, health care will continue to underperform; cause unnecessary harm; and strain national, state, and family budgets. The actions required to reverse this trend will be notable, substantial, sometimes disruptive—and absolutely necessary.”

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