Health care waste in the US estimated at $750 billion

A report released by the Institute for Medicine in September 2012, titled “Best Health Care at lower Cost:The Path to Continuously Learning Health Care in America” , suggests that the US health care system had 30% of wasted expense or $750 billion in 2009. The report points to specialization of expertise and thus fragmented care coupled with the need to customize treatment as creating complexity. It suggests that the combination of improved computing, collaboration across the supply chain and improved organizational capabilities could enable reduction of this waste. But how should all the experts be incented to consider overall supply chain costs ? Should the be a system of tokens that reallocates costs back to providers if additional downstream costs are incurred to treat patients ? Will the savings enable expansion of coverage or increased profits to participants or both ? Will the Federal government need to play the role of a traffic cop with the data to enable coordination or can private coordinating company roles be designed to reap these benefits ?

About aviyer2010

Professor
This entry was posted in Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , . Bookmark the permalink.

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