We have all heard it before: despite the United States’ excessive health care spending—almost 2.5 times higher per capita than in comparable countries—health outcomes are no better here than in other countries. Even worse, in 2011, the Institute of Medicine estimated that 31 percent of our health care spending, or $750 billion per year, is for wasteful services. In 2011, Donald M. Berwick and Andrew D. Hackbarth calculated a slightly higher proportion– 34 percent.

 

Further, earlier this year, Daniel O’Neill and David Scheinker concluded in a Health Affairs article that “the steady rise in overall health expenditures, implies that wasted spending now comfortably exceeds $1 trillion annually, a sum that could fund the entire Medicaid program twice over.”

 

Alarmed by these trends, public and private purchasers are implementing strategies to direct their own employees away from unnecessary or wasteful spending.