About 25 percent of U.S. healthcare spending can be classified as waste, according to a new study published in JAMA Oct. 7.
For the study, researchers from Humana and the University of Pittsburgh School of Medicine analyzed 54 peer-reviewed studies, government reports and other medical literature to estimate the levels of waste in the U.S. healthcare system.
Researchers divided waste into six previously developed categories including: failure of care delivery; failure of care coordination; overtreatment or low-value care; pricing failure; fraud and waste; and administrative complexity.
Administrative complexity accounted for the most waste with $265.6 billion annually, followed by pricing failure or inefficiencies, which accounted for up to $240.6 billion in waste per year.
Approximately $300 billion in waste accrued from failure of care delivery, failure of care coordination and overtreatment. The study estimated that about half of this waste could be avoided.
Overall, the researchers found that the cost of waste in the U.S. healthcare system ranges from $760 billion to $935 billion annually.
Of the $760 billion to $935 billion of waste, researchers estimated that using interventions found to reduce waste could cut between $191 billion and $282.1 billion in healthcare spending.
Access the full report here.