In a recently published article by Ricardo Alonso Zaldivar, reporting for the Associate Press, our healthcare system wastes $750 billion a year.  Almost 30 cents of every dollar is spent on unneeded care, paperwork, and fraud, according to the Institute of Medicine.

"Health care in America presents a fundamental paradox," said the report from an 18-member panel of prominent experts, including doctors, business people, and public officials. "The past 50 years have seen an explosion in biomedical knowledge, dramatic innovation in therapies and surgical procedures, and management of conditions that previously were fatal ...

In 18 months, the report identified six major areas of waste: unnecessary services ($210 billion); inefficient delivery of care ($130 billion); excess administrative costs ($190 billion); inflated prices ($105 billion); prevention failures ($55 billion), and fraud ($75 billion). Adjusting for some overlap among the categories, the panel settled on an estimate of $750 billion.

Examples of wasteful spending includes most repeated colonoscopies within 10 years of each other, early imaging for most back pain, and brain scans for patients who fainted without having seizures.

The report recommends, payment reforms, improved coordination among providers, leveraging technology to reinforce sound clinical decisions and educating patients to become more savvy consumers.

The report's main message for government is to accelerate payment reforms, said panel chair Dr. Mark Smith, president of the California HealthCare Foundation, a research group.  "It's a huge hill to climb, and we're not going to get out of this overnight," said Smith. "The good news is that the very common notion that quality will suffer if less money is spent is simply not true. That should reassure people that the conversation about controlling costs is not necessarily about reducing quality."

"American health care is falling short on basic dimensions of quality, outcomes, costs and equity," the report concluded.  Controlling health care costs is one of the keys to reducing the national deficit.  The Institute of Medicine is an independent organization that advises the government.

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