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“Waste in the US health care system is real, of monumental and quantifiable magnitude, and stands in the way of sustainability of health care and achievement of the Triple Aim.”
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Reduce Waste and Return the Cost Savings

By Molly Bogan | Friday, September 20, 2019


Spending on health care in the US is growing at an unsustainable rate, waste is endemic in health care and, to address the opportunities effectively, we need significant redesign. The new Call to Action: Reduce Waste in the US Health Care System and Return the Cost Savings to Patients and the Economy and companion, Trillion Dollar Checkbook: Reduce Waste and Cost in the US Health Care System, informed by the collective experience and wisdom of Institute for Healthcare Improvement (IHI) Leadership Alliance members, lays out a logical model for proactively identifying and eliminating waste.

What is Waste?

The IHI Alliance, a collaboration of 50 leading health care organizations, defines waste as resources expended in services, money, time, and/or personnel that do not add value for the patient, family, or community. In some cases, this waste can even harm patients, adding further cost. Everything health care providers do can be divided into two categories. The first adds value for the customer — in this case the patient, their family, employer, health plans — that they would be willing to pay for. The second does not and is, quite simply, waste.

The Alliance’s waste focus was formed based on a recognition of the unsustainability of the status quo of spending in US health care, representing a disproportionate and ever-increasing percentage of the US gross domestic product, predicted by some to reach 20 percent or higher by 2020 to 2025. Critical to understanding growing costs is the recognition that a significant proportion of spending is wasteful; and, unfortunately, some waste generates income for providers, health care industry vendors, health systems, and health plans, which reinforces barriers to change.

The Alliance believes that eliminating waste in health care is essential to providing care at an affordable cost and, while we recognize that many health care organizations are committed to reducing waste, there is still much more to do and learn from one another. In our view, a willingness to face the tough questions is fundamental to this work.

Call to Action: Reduce Waste in the US Health Care System and Return the Cost Savings to Patients and the Economy and the Trillion Dollar Checkbook: Reduce Waste and Cost in the US Health Care System provide a strategic framework and in-depth analysis of significant and often complex opportunities to reduce waste and cost in the United States health care system.

The premise of the Checkbook is that successful waste reduction in the health care system would, in effect, enable writing a “check” back to the American people or repurposing those savings to support essential patient-care services or meet community needs. Presented as a “work in progress,” the items in the checkbook assembled to date, with intentionally conservative estimates based on the literature, totals close to $0.9 trillion. We invite others to contribute their ideas to the conversation.

The Call to Action:

  1. Endorse local health system adoption of strategies to reduce non-value-added waste,
  2. Form collaborative partnerships for action in local, state and national communities to address more complex waste reduction opportunities, and
  3. Advocate for health care reforms and redesign to address systemic regulatory, legislative, and other barriers to repurposing or returning the cost savings to patients and the economy.

Waste in the US health care system is real, of monumental and quantifiable magnitude, and stands in the way of sustainability of health care and achievement of the Triple Aim. The Call to Action and companion Trillion Dollar Checkbook have undertaken to identify the many forms of waste systematically and specifically, to quantify the potential savings based on specific published examples, and to develop a broad strategic framework to achieve the aim of driving out non-value-added waste in health care. Now is the time for health systems and providers to commit to do our part to reduce waste in the US health care system.

Our aspiration is that this approach will intrigue and inspire health care organizations, broader coalitions and collaborative partnerships, payers, and governmental agencies to act on this imperative issue. For this effort to bear fruit, it will require a concerted and coordinated effort in the relentless, thoughtful, and strategic pursuit of eliminating waste. To be sure, the work to identify and reduce waste is difficult. The absolute necessity of pursuing this work for the sake of better and more affordable care for all patients, and current and future generations, is equally certain.

Molly Bogan, MA is a Senior Director at the Institute for Healthcare Improvement. Helen Macfie, PharmD is Chief Transformation Officer at MemorialCare Health System. James Leo, MD is Chief Medical Officer at MemorialCare Health System.

Editor’s note: Helen Macfie, PharmD and James Leo, MD will share more details on their work at the IHI National Forum during the sessions D/E05: IHI Alliance Driving out Waste to Return the Money on Wednesday, December 11 2019  from 9:30 AM – 10:45 AM and again from 11:15 AM – 12:30 PM.

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