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Healthcare Waste
According to New England Journal of Medicine’s Journal Watch, Americans may be wasting half of the $3.6 trillion spent annually on healthcare. Researchers identified six studies, published from 2008 to 2019, in which components of our national medical waste were analyzed, and estimated the costs associated with each.
| Category | Amount ($ billions) |
|---|---|
| Excessive prices | $169 |
| Fraud and abuse | $185 |
| Clinical inefficiency | $202 |
| Administrative waste | $281 |
| Missed prevention opportunities | $310 |
| Overuse | $451 |
Estimated total waste was between $600 billion and almost $2 trillion. The Pareto Analysis of these costs looks like this.
Anyone familiar with Lean can immediately spot opportunities for applying Lean to this mess. The Pyzdek Institute’s Lean Healthcare Specialist program covers a wide range of tools and techniques for doing this.
While the dollar amounts are literally too huge to grasp, the fact is that unnecessary healthcare spending also adds to human suffering. Unnecessary tests and treatments are often harmful to patients so money is spent making sick people even sicker, hardly the goal of doctors and nurses. Dollars cannot begin to cover this cost, but in the end it may be even larger than the quantifiable dollar cost.
One response to “Healthcare Waste”
Again, Tom Pyzdek applies Lean Principles and Statistical Thinking to improve quality and quality-of-life.
Based on hard results posted since my 2009 Pyzdek Lean Six Sigma Black Belt, I can clearly state that Tom’s approach works incredibly well in manufacturing, biotechnology and other industries. I have no doubt they’d work equally well in a medical environment.
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