BOX A-1

Excess Cost Domain Estimates: Lower bound totals from workshop discussions*

UNNECESSARY SERVICES

Total excess = $210 B*

  • Overuse: services beyond evidence-established levels

  • Discretionary use beyond benchmarks

    • Defensive medicine

  • Unnecessary choice of higher cost services

INEFFICIENTLY DELIVERED SERVICES

Total excess = $130 B*

  • Mistakes—medical errors, preventable complications

  • Care fragmentation

  • Unnecessary use of higher cost providers

  • Operational inefficiencies at care delivery sites

    • Physician offices

    • Hospitals

EXCESS ADMINISTRATIVE COSTS

Total excess = $190 B*

  • Insurance-related administrative costs beyond benchmarks

    • Insurers

    • Physician offices

    • Hospitals

    • Other providers

  • Insurer administrative inefficiencies

  • Care documentation requirement inefficiencies

PRICES THAT ARE TOO HIGH

Total excess = $105 B*

  • Service prices beyond competitive benchmarks

    • Physician services

      1. Specialists

      2. Generalists

    • Hospital services

    • Product prices beyond competitive benchmarks

    • Pharmaceuticals

    • Medical devices

    • Durable medical equipment

MISSED PREVENTION OPPORTUNITIES

Total excess = $55 B*

  • Primary prevention

  • Secondary prevention

  • Tertiary prevention

FRAUD

Total excess = $75 B*

  • All sources—payer, clinician, patient fraud

  

*Lower bound totals of various estimates, adjusted to 2009 total expenditure level.



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