Wasteful Health Care Spending

Subject: Healthcare Financing
Pages: 1
Words: 285
Reading time:
2 min

In the United States, the percentage of wasteful health care spending is often regarded as the highest one in the world. Researchers and experts have examined this issue with reference to the fact that the United States expends significant resources on health care, and much lost or wasteful spending can have negative effects on the healthcare system (Austin & Wetle, 2017). The problem is that about 30% of overall health care spending in the country can be discussed as waste because of the absence of positive effects on healthcare delivery and patients’ outcomes (Shrank et al., 2019). However, it is also important to note that some services can be regarded as more inefficient than others in this context.

Researchers have tried to determine types of health care spending that can be considered as most inappropriate and uneconomical for hospitals and other healthcare facilities. According to Shrank et al. (2019), the highest annual cost of lost resources in the health care system is associated with administrative complexity, and the related sum is more than $265 billion per year. Furthermore, it is also interesting to note that the annual cost for pricing failure is also high, and it is $230-240 billion (Shrank et al., 2019). These categories should be regarded as the most cost-inefficient ones for the US healthcare system. It is important to eliminate expenditure for administrative functions in US healthcare facilities and regulate pricing procedures. As a result, it will be possible to redistribute saved costs to cover the areas that can remain underfunded in the situation of observing wasteful spending. Thus, if expenditure associated with the category of administrative complexity can be reduced, the effects of such reductions can be minimally noticed by patients.


Austin, A., & Wetle, V. (2017). The United States health care system: Combining business, health, and delivery (3rd ed.). Pearson Education.

Shrank, W. H., Rogstad, T. L., & Parekh, N. (2019). Waste in the US health care system: Estimated costs and potential for savings. JAMA, 322(15), 1501-1509.