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WHITE PAPERWHERE CAN 700 BILLION IN WASTE BE CUT ANNUALLY FROM THE US WHITE PAPERWHERE CAN 700 BILLION IN WASTE BE CUT ANNUALLY FROM THE US

WHITE PAPERWHERE CAN 700 BILLION IN WASTE BE CUT ANNUALLY FROM THE US - PDF document

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WHITE PAPERWHERE CAN 700 BILLION IN WASTE BE CUT ANNUALLY FROM THE US - PPT Presentation

ROBERT KELLEYVICE PRESIDENTHEALTHCARE ANALYTICSTHOMSON REUTERSOCTOBER 2009Where can 700 billion in waste be cut annually 3TUJNBUFTTVHHFTUUIBUBTNVDIBTCJMMJPOBZFBSJOIFBMUIDBSFDPTUTEPOPUJNQSPWFIFBMUIPV ID: 897596

waste billion cut 700 billion waste 700 cut annually healthcare care journal health reuters thomson american evidence medicine percent

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1 WHITE PAPERWHERE CAN $700 BILLION IN WAS
WHITE PAPERWHERE CAN $700 BILLION IN WASTE BE CUT ANNUALLY FROM THE U.S. HEALTHCARE SYSTEM? ROBERT KELLEYVICE PRESIDENT,HEALTHCARE ANALYTICSTHOMSON REUTERSOCTOBER 2009 Where can $700 billion in waste be cut annually? 3…²&TUJNBUFTTVHHFTUUIBUBTNVDIBTCJMMJPOBZFBSJOIFBMUIDBSFDPTUTEPOPUJNQSPWFIFBMUIPVUDPNFT5IFZPDDVSCFDBVTFXFQBZGPSNPSFDBSFSBUIFSUIBOCFUUFSDBSF8FOFFEUPCFNPWJOHUPXBSETBTZTUFNJOXIJDIEPDUPSTBOEIPTQJUBMTIBWFJODFOUJWFTUPQSPWJEFUIFDBSFUIBUNBLFTZPVCFUUFS\rSBUIFSUIBOUIFDBSFUIBUKVTUSFTVMUTJONPSFUFTUTBOENPSFEBZTJO&#xUI;ðIPTQJUBM³±1FUFS0ST[BH\rEJSFDUPSPGUIF8IJUF)PVTF0G¾DFPG.BOBHFNFOUBOE#VEHFU\r.BZJOUFSWJFXXJUI/13…+BDL8FOOCFSHPG%BSUNPVUIµT$FOUFSGPSUIF&WBMVBUJWF$MJOJDBM4DJFODFTJTPGUFORVPUFEBTIBWJOHTBJE²©VQUPPOFUIJSEPGUIFPWFSUSJMMJPOUIBUXFOPXTQFOEBOOVBMMZPOIFBMUIDBSFJTTRVBOEFSFEPOVOOFDFTTBSZIPTQJUBMJ[BUJPOTVOOFFEFEBOEPGUFOSFEVOEBOUUFTUTVOQSPWFOUSFBUNFOUTPWFSQSJDFE\rDVUUJOHFEHFESVHTEFWJDFTOPCFUUFSUIBOUIFMFTTFYQFOTJWFQSPEVDUTUIFZSFQMBDFEBOEFOEPGMJGFDBSFUIBUCSJOHTOFJUIFSDPNGPSUDBSFOPSDVSF³…5IF.D,JOTFZ(MPCBM*OTUJUVUF\rJOBTUVEZ\rDPNQBSFE6OJUFE4UBUFT 64\nIFBMUIDBSFDPTUTUPUIPTFPGPUIFSQFFS0SHBOJ[BUJPOGPS&DPOPNJD$PPQFSBUJPOBOE%FWFMPQNFOU 0&$%\nDPVOUSJFTBOEGPVOEUIBUUIF64TQFOUOFBSMZCJMMJPONPSFPOIFBMUIDBSF11 INTRODUCTION How America will pay for healthcare is a subject on the mind of virtually every American today. As Congress determines who will pick up the tab for this important and growing expense, it is worthwhile to take a close look at the cost of healthcare itself. Are there areas where expenses can be cut without undermining the quality of care provided? How prevalent are misuse, overuse, and fraud? This paper tackles the tangled issue of healthcare waste and arrives at some interesting, and perhaps even surprising, conclusions: America!s healthcare system is, indeed, hemorrhaging billions of dollars, and the opportunities to slow the "scal bleeding are substantial. 4 Where can $700 billion in waste be cut annually?*OUIJTXIJUFQBQFS\rXFQSFTFOUFWJEFODFUIBUTVQQPSUTUIFSFBTPOBCMFOFTTPGUIFTFDMBJNT5IJTFWJEFODFIBTCFFOHBUIFSFEGSPNQVCMJTIFESFTFBSDITUVEJFT\rFYQFSUPQJOJPO\rBOE¾OEJOHTGSPNPVSPXO5IPNTPO3FVUFSTBOBMZTFTPGPVSMBSHFIFBMUIDBSFEBUBCBTFT8FEFTDSJCFUIFUZQFTPGXBTUFUIBUBSFSFDPHO

2 J[FECZNPTUFYQFSUT
J[FECZNPTUFYQFSUTBMPOHXJUIFTUJNBUFTPGUIFNBHOJUVEFPGUIBUXBTUF*ONPTUDBTFT\rFBDISFGFSFODFESFTFBSDITUVEZGPDVTFTPOBTQFDJ¾DUZQFPSJOTUBODFPGXBTUF8FTVHHFTUUIBUEJGGFSFOUJBUJOHBOEDIBSBDUFSJ[JOHUIFUZQFTPGXBTUFGBDJMJUBUFTUIFTFBSDIGPSBOEUIFFMJNJOBUJPOPGTQFDJ¾DXBTUFCZIFBMUIDBSFQSPWJEFSTBOEUIPTFPSHBOJ[BUJPOTUIBUBSFSFTQPOTJCMFGPSQBZJOHGPSUIFTFTFSWJDFT5IFFGGPSUTUPNFBTVSFXBTUFBSFCBTFEPOUIFQSFNJTFUIBUJUNBZCFQSFNBUVSFUPEFTDSJCFBIJHIMZFG¾DJFOUIFBMUIDBSFTZTUFN\rCVUUIFFWJEFODFGPSXBTUFJTBCVOEBOU WHY IDENTIFY !WASTE" IN THE U.S. HEALTHCARE SYSTEM? *UJTBDPNNPOQFSDFQUJPOUIBUIFBMUIDBSFDPTUTJOUIF6OJUFE4UBUFTBSF²UPPIJHI³8IFODPNQBSFEUPIFBMUIDBSFTQFOEJOHCZPUIFSEFWFMPQFEDPVOUSJFT\rJUµTFBTZUPTFFXIBUJTESJWJOHUIJTQFSDFQUJPO5IF64TQFOETNPSFQFSDBQJUB\rBOEUIFIJHIFTUQFSDFOUBHFPG(%1\rPOIFBMUIDBSFUIBOBOZPUIFS0&$%DPVOUSZBTSFQPSUFEJOUIF.BSDI\r²5SFOETJO)FBMUIDBSF$PTUTBOE4QFOEJOH³CZ,BJTFS'BNJMZ'PVOEBUJPO5IFZBMTPSFQPSUFEUIBU²5IF6OJUFE4UBUFTEFWPUFTDPOTJEFSBCMZNPSFPGJUTFDPOPNZUPIFBMUIDBSFUIBOPUIFSEFWFMPQFEDPVOUSJFT³ 1015 20 United States 15.3%10.0%11.0%10.6%8.1%8.4%11.3% CanadaFrance Germany Japan United KingdomSwitzerland )FBMUIDBSF4QFOEJOH4IBSFPG(%1JO Source: Kaiser Family Foundation, Trends in Healthcare Costs and Spending, March 2009. Where can $700 billion in waste be cut annually? 55IF'PVOEBUJPOGVSUIFSSFQPSUFE\r² 64\nIFBMUIDBSFTQFOEJOHIBTSJTFOBCPVUQFSDFOUBHFQPJOUTGBTUFSUIBO(%1TJODF³/PUPOMZEPFTDVSSFOUTQFOEJOHPOIFBMUIDBSFDPOTVNFBIJHIQFSDFOUBHFPG(%1\rCVUUIFQFSDFOUBHFJTFYQFDUFEUPDPOUJOVFSJTJOH$POUJOVJOHHSPXUIJOHPWFSONFOUTQFOEJOHGPSIFBMUIDBSFJTFYQFDUFEUPMFBEUPQSPHSBNDPTUT\rTVDIBTUIFDPTUUPSVO.FEJDBSF\rUIBUFYDFFEUIFOBUJPOµTDBQBDJUZUPQBZ5IFHPWFSONFOUJTOPUUIFPOMZFOUJUZEFBMJOHXJUIUIFIJHIDPTUPGIFBMUIDBSF*UDPTUT64FNQMPZFSTTVCTUBOUJBMMZNPSFUPQSPWJEFIFBMUIDBSFGPSFNQMPZFFT\rUIFJSGBNJMJFT\rBOESFUJSFFTUIBOUIFJSGPSFJHODPNQFUJUPST(FOFSBM.PUPST\rGPSFYBNQMF\rTQFOU

3 CJMMJPOJOPOI
CJMMJPOJOPOIFBMUIDBSF5IJTJTTJHOJ¾DBOUMZNPSFUIBOUIFZTQFOUGPSTUFFMBOEBDDPVOUFEGPS\rPGUIFQSJDFPGFBDIOFXDBSJUQSPEVDFE5PSFNBJODPNQFUJUJWF\rFNQMPZFSTBSFQBTTJOHBTIBSFPGUIFCVSEFOUPFNQMPZFFT\rNBLJOHDPOTVNFSTBMTPGFFMBEJSFDUJNQBDUPGUIFJODSFBTJOHDPTUPGIFBMUIDBSF±BUSFOEUIBUJTFYQFDUFEUPDPOUJOVF4P\rXIBUJTBSFBTPOBCMFDPTUGPSIFBMUIDBSF 6OMJLFDPOTVNFSNBSLFUTGPSHPPETTVDIBTBVUPNPCJMFTPSQFSTPOBMFMFDUSPOJDT\rXIFSFNBSLFUTVQQMZBOEEFNBOEEFUFSNJOFUIF²SJHIU³QSJDF\rUIFDPNQMJDBUFENBSLFUGPSIFBMUIDBSFEPFTOµU¾UOJDFMZXJUIJOUIFTFOBUVSBMNBSLFUSFHVMBUPST*OBEEJUJPOUPUIFVOVTVBMSFMBUJPOTIJQTJOIFBMUIDBSFCFUXFFODPOTVNFST\rQBZFST\rBOEQSPWJEFST\rUIFFUIJDBMJNQMJDBUJPOTJOWPMWFEJOIFBMUIDBSFEFDJTJPOTNBLFJUOFBSMZJNQPTTJCMFUPEF¾OFUIF²SJHIU³BNPVOUUPTQFOEPOIFBMUIDBSF"TUIFHPWFSONFOU\rFNQMPZFST\rBOEJOEJWJEVBMDJUJ[FOTEFCBUFXIBUJTBOBQQSPQSJBUFBNPVOUUPTQFOEPOIFBMUIDBSF\rUIFSFJTNVDIUIBUDBOCFEPOFUPSFEVDFIFBMUIDBSFDPTUTCZFMJNJOBUJOHXBTUFBOEVOOFDFTTBSZFYQFOEJUVSFTDBVTFECZ….FEJDBMFSSPST…'SBVEBOEBCVTF…1BZNFOUTGPSTFSWJDFTXJUIOPFWJEFODFUIBUUIFZDPOUSJCVUFUPCFUUFSIFBMUIPVUDPNFT…*OFG¾DJFODJFTJOUIFQSPEVDUJPOPGIFBMUIDBSFHPPETBOETFSWJDFT\rJODMVEJOHUIFDPTUPGFYDFTTJWFFSSPST 6 Where can $700 billion in waste be cut annually? HEALTHCARE WASTE DEFINED #FGPSFVOEFSUBLJOHBEJTDVTTJPOPGIFBMUIDBSFDPTUTBOEUIFPQQPSUVOJUJFTUPDPOUSPMUIFNCFUUFS\rJUJTJNQPSUBOUUPVOEFSTUBOEBGFXUFSNTJOUIFDPOUFYUPGUIFEJTDVTTJPO …Cost containment: 5IJTUFSNUZQJDBMMZSFGFSTUPFGGPSUTUPDPOUSPMUIFIJHISBUFPGJODSFBTFJOUPUBMDPTUTPS²CFOEJOHUIFDVSWF³"MUIPVHINPTUPGUIFFGGPSUTBSFDPOTJTUFOUXJUIBHPBMPGFMJNJOBUJOHXBTUF\rBTJNQMFPCKFDUJWFUPDVUPSDPOUBJODPTUTDPVMESFTVMUJODPOTUSBJOJOHQBUJFOUBDDFTTUPWBMVBCMFTFSWJDFT*UJTUIJTDPODFSOUIBUMFBETTPNFQFPQMFUPMJOLDPTUDPOUBJONFOUXJUIUIFNPSFDPOUSPWFSTJBMUFSN²SBUJPOJOH³ …Rationing: 8IFOUIFOFFEGPSIFB

4 MUIDBSFTFSWJDFTFYD
MUIDBSFTFSWJDFTFYDFFETB¾YFEMFWFMPGBWBJMBCMFSFTPVSDFT\rEFDJTJPOTNVTUCFNBEFPOUIFSFMBUJWFNFSJUPGTQFDJ¾DQBUJFOUOFFE5IFSFTVMUJTUIBUTPNFQBUJFOUTXJMMOPUSFDFJWFTPNFTFSWJDFT5IFDPODFQUPGSBUJPOJOHSBJTFTTJHOJ¾DBOUDPODFSOTUIBUB¾YFEMFWFMPGSFTPVSDFTXJMMCFBSCJUSBSJMZEFUFSNJOFEBUBMFWFMXFMMCFMPXXIBUJTUSVMZOFFEFEGPSIJHIRVBMJUZ\rBDDFTTJCMFIFBMUIDBSF"NPSFFYUSFNFDPODFSOJTUIBUEFUFSNJOBUJPOTPGSFMBUJWFOFFEXJMMCFNBEFCBTFEPOTQFDJ¾DQBUJFOUDIBSBDUFSJTUJDT\rTVDIBTBHF …Misuse, Overuse, and Underuse: 5IFTFUFSNTSFGFSUPQBUUFSOTPGNFEJDBMQSBDUJDFBOETFSWJDFTVTFUIBUEJSFDUMZPSJOEJSFDUMZBEEUPIFBMUIDBSFDPTUT5IFDPTUPGBTFSWJDFVTFEJOBQQSPQSJBUFMZ NJTVTF\nBOEVTFPGBTFSWJDFXIFSF\rUIPVHIBQQSPQSJBUFJOTPNFTJUVBUJPOTJTOPUFYQFDUFEUPQSPWJEFWBMVFGPSBTQFDJ¾DQBUJFOU PWFSVTF\n\rBEECPUIEJSFDUDPTUTBOEQPUFOUJBMDPTUTBTTPDJBUFEXJUIBDPNQMJDBUJPOPGUIFQSPDFEVSF5IFGBJMVSFUPEJBHOPTFBDPOEJUJPOJOBOFBSMZTUBHFPSUPQSFWFOUBOFYJTUJOHDPOEJUJPOGSPNCFDPNJOHNPSFTFWFSFPSEFWFMPQJOHDPNQMJDBUJPOTDBOSFTVMUGSPNBGBJMVSFUPQSPWJEFQSFWFOUJWFBOENBJOUFOBODFDBSF VOEFSVTF\n*OUIJTDBTF\rQSPWJEJOHUIFTFSWJDFTXPVMEBEEUPUIFTIPSUUFSNDPTUTCVUDPVMEQSFWFOUUIFTJHOJ¾DBOUMPOHUFSNDPTUTPGUSFBUJOHBNPSFTFWFSFDPOEJUJPO6OEFSVTFIBTCFFOPCTFSWFEJOVOEFSTFSWFEBSFBTXIFSFMBDLPGBDDFTTUPDBSFSFTVMUTJOVOOFDFTTBSZDPNQMJDBUJPOTPSQPPSPVUDPNFT The New England Healthcare Institute (NEHI) has de!ned waste in healthcare as "Healthcare spending that can be eliminated without reducing the quality of care.# Where can $700 billion in waste be cut annually? 7 …Unwarranted or unexplained variation in care: 5IJTUFSNSFGFSTUPUIFPCTFSWFEWBSJBUJPOBDSPTTHFPHSBQIJDSFHJPOTJOUIFVTFPGTQFDJ¾DQSPDFEVSFTUIBUSFTVMUJOOPEJTDFSOJCMFEJGGFSFODFTJOIFBMUIPVUDPNFT"MUIPVHIJUJTOPUQPTTJCMFUPEFUFSNJOFBOBQQSPQSJBUFSBUFGPSUIFTFQSPDFEVSFT\rJUJTJOGFSSFEUIBUCFDBVTFUIFFWJEFODFPOUIFBDUVBMFGGFDUJWFOFTTPGUIFTFQSPDFEVSFTJTBNCJHVPVT\rUIPTFSFHJPOTXJUIIJHIVTFSBUFTBSF²PWFSVUJMJ[JOH³UIFQS

5 PDFEVSFBOEBEEJOHV
PDFEVSFBOEBEEJOHVOOFDFTTBSZDPTUT …Fraud and abuse: "TJUVBUJPOJOXIJDIIFBMUIDBSFJTQBJEGPS\rCVUOPUQSPWJEFE\rPSBTJUVBUJPOJOXIJDISFJNCVSTFNFOUDMBJNTBSFNBEFUPUIJSEQBSUZJOTVSBODFDPNQBOJFTPSGFEFSBMQSPHSBNTTVDIBT.FEJDBSFPS.FEJDBJE\rBOEOPTVDITFSWJDFTXFSFSFOEFSFE'SBVEBOEBCVTFBSFBMTPEF¾OFEBTIFBMUIDBSFQSPWJEFSTSFDFJWJOHLJDLCBDLT\rQBUJFOUTTFFLJOHUSFBUNFOUTUIBUBSFQPUFOUJBMMZIBSNGVMUPUIFN TVDIBTTFFLJOHESVHTUPTBUJTGZBEEJDUJPOT\n\rBOEUIFQSFTDSJQUJPOPGTFSWJDFTLOPXOUPCFVOOFDFTTBSZ5IFEF¾OJUJPOXFVTFGPSUIJTQBQFSJTGSPN5IF/FX&OHMBOE)FBMUIDBSF*OTUJUVUF /&)*\nXIJDIIBTEF¾OFEXBTUFJOIFBMUIDBSFBT!Healthcare spending that can be eliminated without reducing the quality of care."*UJTJNQPSUBOUUPOPUFUIBUNPTUPGUIFXBTUFOPUPOMZSFQSFTFOUTBOVOOFDFTTBSZDPTU\rCVUDBOBMTPSFTVMUJOBOJODSFBTFESJTLPGQIZTJDBMTVGGFSJOHPSIBSN FH\rVOOFDFTTBSZTVSHJDBMQSPDFEVSF\rXJUISJTLPGDPNQMJDBUJPOTPSEFBUI\n5IJTEF¾OJUJPOJODMVEFTXBTUFEF¾OFEBTNJTVTF\rPWFSVTF\rBOEVOEFSVTFBOEXBTUFSFTVMUJOHGSPNVOXBSSBOUFEWBSJBUJPO8BTUFEF¾OFEJOUIJTXBZQSPWJEFTBUBSHFUGPSDPTUDPOUBJONFOUFGGPSUTCVUEPFTOPUJOWPMWFBOZMFWFMPGSBUJPOJOH\rTJODFJUPOMZBEESFTTFTTFSWJDFTUIBUBSFOPUDPOTJEFSFEOFDFTTBSZGPSRVBMJUZQBUJFOUDBSFBOEEPOPUDPOUSJCVUFUPPWFSBMMPVUDPNFTPGDBSF5IFSFGPSF\rBOFYQFOEJUVSFDMBTTJ¾FEBTXBTUFBDDPSEJOHUPUIJTEF¾OJUJPOEPFTOPUDPOUSJCVUFUP…5IFRVBMJUZPGIFBMUIDBSFTFSWJDFT…5IFPVUDPNFTPGDBSF…5IFIFBMUITUBUVTPGUIFQPQVMBUJPO 8 Where can $700 billion in waste be cut annually? HOW MUCH WASTE IS THERE IN HEALTHCARE? 5PPSHBOJ[FUIFFWJEFODFTVQQPSUJOHDMBJNTGPSUIFNBHOJUVEFPGXBTUFJOUIFIFBMUIDBSFTZTUFN\rXF¾STUTVHHFTUBTFUPGDBUFHPSJFTPGXBTUF'PSFBDIDBUFHPSZ\rUIFSFJTBTJNQMFEF¾OJUJPO\rBCSJFGEFTDSJQUJPOPGUIFFYBNQMFT\rBOESFGFSFODFTUIBUBMMPXVTUPNBLFBSFBTPOBCMFBTTFTTNFOUPGUPUBMBOOVBMXBTUFGPSFBDIDBUFHPSZ$BUFHPSZSFTVMUTBSFUIFOBHHSFHBUFEUPFTUJNBUFBSFBTPOBCMFSBOHFGPSUPUBMBOOVBMIFBMUIDBSFTZTUFNXBTUF

6  CATEGORIES OF HEALTHCARE WASTE #FO
 CATEGORIES OF HEALTHCARE WASTE #FOUMFZ\rFUBM17EJTDVTTUISFFUZQFTPGXBTUFBENJOJTUSBUJWF\rPQFSBUJPOBM\rBOEDMJOJDBM5IFZBMTPDPOTJEFSTQFDJ¾DFYBNQMFTPGXBTUFJOFBDIDBUFHPSZBOEUIFFTUJNBUFEWBMVFPGUIBUXBTUF#BTFEPOPVSPXOSFTFBSDI\rJOBEEJUJPOUPBSFWJFXPGPUIFSQVCMJTIFEMJUFSBUVSF\rXFGFFMJUJTNPSFVTFGVMUPSFWJFXXBTUFJOTJYDBUFHPSJFT'PSFBDIPGPVSDBUFHPSJFTPGXBTUF±"ENJOJTUSBUJWF4ZTUFN*OFG¾DJFODJFT\r1SPWJEFS*OFG¾DJFODZBOE&SSPST\r-BDLPG$BSF$PPSEJOBUJPO\r6OXBSSBOUFE6TF\r1SFWFOUBCMF$POEJUJPOTBOE"WPJEBCMF$BSF\rBOE'SBVEBOE"CVTF±XFSFWJFXFE¾OEJOHTGSPNPVSPXOBOBMZTFTPGPVSQSPQSJFUBSZIFBMUIDBSFEBUBCBTFT\rBOETZOUIFTJ[FEUIFSFTVMUTPGSFDFOUQVCMJTIFETUVEJFTBOEFYQFSUPQJOJPO5IFSFTVMUJTBOFTUJNBUFESBOHFGPSUIFUPUBMWBMVFPGQPTTJCMFXBTUFJOUIBUDBUFHPSZ"OVOEFSTUBOEJOHPGUIFHFOFSBMNBHOJUVEFPGUIFWBSJPVTUZQFTPGXBTUFTIPVMEIFMQUPQSJPSJUJ[FBOEGPDVTFGGPSUTUPJNQSPWFTZTUFNFG¾DJFODZ8FXPVMEMJLFUPBDLOPXMFEHFUIFXPSLPGUIF/FX&OHMBOE)FBMUIDBSF*OTUJUVUF\rQSFTFOUFEJO²8BTUFBOE&G¾DJFODZJOUIF64)FBMUIDBSF4ZTUFN³BTQSPWJEJOHWBMVBCMFJOTJHIUPOTFWFSBMPGUIFDBUFHPSJFT$JUBUJPOTGPSBMMRVPUFESFGFSFODFT\rJODMVEJOHUIJTEPDVNFOU\rBSFJODMVEFEJOUIFSFGFSFODFT Where can $700 billion in waste be cut annually? 9 Evidence supporting the existence of administrative system inef!ciencies is extensive: …²5IFBWFSBHF64IPTQJUBMTQFOETPOFRVBSUFSPGJUTCVEHFUPOCJMMJOHBOEBENJOJTUSBUJPO\rOFBSMZUXJDFUIFBWFSBHFJO$BOBEB"NFSJDBOQIZTJDJBOTTQFOEOFBSMZFJHIUIPVSTQFSXFFLPOQBQFSXPSLBOEFNQMPZDMFSJDBMXPSLFSTQFSEPDUPS\rGBSNPSFUIBOJO$BOBEB³…²*O\rIFBMUIBENJOJTUSBUJPODPTUTUPUBMFEBUMFBTUCJMMJPOJOUIF6OJUFE4UBUFT\rPS\rQFSDBQJUB\rBTDPNQBSFEXJUIQFSDBQJUBJO$BOBEB"GUFSFYDMVTJPOT\rBENJOJTUSBUJPOBDDPVOUFEGPSQFSDFOUPGIFBMUIDBSFFYQFOEJUVSFTJOUIF6OJUFE4UBUFTBOEQFSDFOUPGIFBMUIDBSFFYQFOEJUVSFTJO$BOBEB³/PUF"SFEVDUJPOGSPNUPQFSDFOUXPVMETBWF$126 billionBOOVBMMZ…²5IJT

7 JTTVFCSJFGFYBNJOFT
JTTVFCSJFGFYBNJOFTUIFTPVSDFTPGBENJOJTUSBUJWFDPTUTBOEEFTDSJCFTIPXBQSJWBUFQVCMJDBQQSPBDIUPIFBMUIDBSFSFGPSN±XJUIUIFDFOUSBMGFBUVSFPGBOBUJPOBMJOTVSBODFFYDIBOHF MBSHFMZSFQMBDJOHUIFQSFTFOUJOEJWJEVBMBOETNBMMHSPVQNBSLFUT\n±DPVMETVCTUBOUJBMMZMPXFSTVDIDPTUT*OUISFFWBSJBUJPOTPOUIBUBQQSPBDI\rFTUJNBUFEBENJOJTUSBUJWFDPTUTXPVMEGBMMGSPNQFSDFOUPGDMBJNTUPBOBWFSBHFPGQFSDFOU4BWJOHT±BTNVDIBT$265 billion over 2010"2020±XPVMECFSFBMJ[FEUISPVHIMFTTNBSLFUJOHBOEVOEFSXSJUJOH\rSFEVDFEDPTUTPGDMBJNTBENJOJTUSBUJPO\rMFTTUJNFTQFOUOFHPUJBUJOHQSPWJEFSQBZNFOUSBUFT\rBOEGFXFSPSTUBOEBSEJ[FEDPNNJTTJPOTUPJOTVSBODFCSPLFST³…5IF1SJDFXBUFSIPVTF$PPQFSTµ)FBMUI3FTFBSDI*OTUJUVUFFTUJNBUFEPQFSBUJPOXBTUFUPCF$126 to $315 billionQFSZFBS\rXJUIXBTUFJOUIFDMBJNTQSPDFTTJOHBMPOFBUUPCJMMJPO…²8IFOUJNFJTDPOWFSUFEUPEPMMBST\rXFFTUJNBUFUIBUUIFOBUJPOBMUJNFDPTUUPQSBDUJDFTPGJOUFSBDUJPOTXJUIQMBOTJTBUMFBTU$23 billion to $31 billionFBDIZFBS³10…²)FBMUIBENJOJTUSBUJPODPTUTSFQSFTFOU$91 billion\rPSQFSDFOUPGUPUBMTQFOEJOHBCPWFFYQFDUFE\rEVFQBSUMZUPUIFTZTUFNTUSVDUVSF\rCVUBMTPPOBDDPVOUPGJOFG¾DJFODJFTBOESFEVOEBODJFTUIBUFYJTUXJUIJOUIFTZTUFN³11 ADMINISTRATIVE SYSTEM INEFFICIENCIESReasonable Range For Annual Waste: $100!$150 Billion "MMPSHBOJ[BUJPOT\rBDSPTTBMMJOEVTUSJFT\rIBWFJOFG¾DJFOUBENJOJTUSBUJWFQSPDFTTFT)PXFWFS\rJOIFBMUIDBSF\rUIFTFSJPVTGSBHNFOUBUJPOPGQSPWJEFST\rUIFMBSHFOVNCFSPGQBZFST\rBOESFTVMUJOHEJTQBSBUFTZTUFNTBOEQSPDFEVSFTTJHOJ¾DBOUMZBEEUPQSPWJEFSBOEQBZFSBENJOJTUSBUJWFDPTUT)FBMUIDBSFQSPWJEFSTNVTUEFBMXJUIEP[FOTPGIFBMUIBOECFOF¾UQMBOTUPCJMMTVDDFTTGVMMZGPSTFSWJDFTSFOEFSFE)FBMUIQMBOTNVTUTVQQPSUTZTUFNTGPSVOEFSXSJUJOH\rDMBJNTBENJOJTUSBUJPO\rQSPWJEFSOFUXPSLDPOUSBDUJOH\rBOECSPLFSOFUXPSLNBOBHFNFOU"DDPSEJOHUPBQPTJUJPOQBQFSCZUIF.FEJDBM(SPVQ.BOBHFNFOU"TTPDJBUJPO\r²4JNQMJGZJOHPVSIFBMUIDBSFTZTUFNµTBENJOJTUSBUJPODPVMESFEVDFBOOVBMIFBMUIDBSFDPTUTCZBMNPTUCJMMJPO³ 10

8 Where can $700 billion in waste be cut
Where can $700 billion in waste be cut annually? PROVIDER INEFFICIENCY AND ERRORS Reasonable Range for Annual Waste: $75!$100 Billion *OFG¾DJFODJFTJOUIFDBSFEFMJWFSZQSPDFTTFTPGJOEJWJEVBMQSPWJEFSTSFTVMUJOTJHOJ¾DBOUXBTUF.BOZQSPWJEFSQSPDFTTJOFG¾DJFODJFTBSFTJNJMBSUPUIPTFFYQFSJFODFEJOPUIFSUZQFTPGPSHBOJ[BUJPOT\rTVDIBTSFTPVSDFTDIFEVMJOHBQQSPQSJBUFNJYPGHFOFSBMMPXFSDPTUBOETQFDJBMJ[FEIJHIFSDPTUSFTPVSDFTGBDJMJUZPSFRVJQNFOUVUJMJ[BUJPOPSUISPVHIQVUBOEUJNJOHBOEDPPSEJOBUJPOPGNVMUJQMFQSPDFEVSFTGPSBTJOHMFQBUJFOUUPNJOJNJ[FEPXOUJNF%PDVNFOUFEFYBNQMFTPGUIFTFUZQFTPGJOFG¾DJFODJFTJODMVEF…*OFG¾DJFOUVTFPGQSPGFTTJPOBMTUBGGFYUFOEFSTTVDIBTOVSTFQSBDUJUJPOFSTBOEQIZTJDJBOBTTJTUBOUT…*OFG¾DJFOUVTFPGGBDJMJUJFTBOEFRVJQNFOU\rTVDIBTMPXVUJMJ[BUJPOPGFYQFOTJWFJNBHJOHFRVJQNFOUBOEJOFG¾DJFOUTDIFEVMJOHPGPQFSBUJOHSPPNTBOEUFBNT…6OOFDFTTBSZPOFEBZIPTQJUBMBENJTTJPOT FH\rGPSPCTFSWBUJPOPSSPVUJOFUFTUJOH\nBOEFYUFOEFETUBZT…0WFSVUJMJ[BUJPOPGUFTUJOH FH\rMBC\rJNBHJOH\nGPSIPTQJUBMJ[FEQBUJFOUT…0WFSVUJMJ[BUJPOPGJOUFOTJWFDBSFVOJUT"4FQUFNCFS5IPNTPO3FVUFST3FTFBSDI#SJFGSFQPSUT\r²5IFSFBSFFOPSNPVTEJGGFSFODFTCFUXFFOUIFCFODINBSLBOEUIFXPSTUIPTQJUBMTPOPQFSBUJPOBMFG¾DJFODZNFBTVSFT³125IFSFQPSUDPNQBSFTIPTQJUBMTPONFBTVSFTPGCPUIPQFSBUJPOBMFG¾DJFODZBOEDMJOJDBMRVBMJUZBOEDPODMVEFTUIBUBDIJFWJOHCFODINBSLPQFSBUJPOBMQFSGPSNBODFEPFTOPUUISFBUFODMJOJDBMRVBMJUZ&GGPSUTUPJNQSPWFPQFSBUJPOBMFG¾DJFODZJOWPMWFJNQSPWJOHQSPDFTTFT\rOPUNFSFMZDPTUDVUUJOH5IFSFQPSUPGGFSTUIBU²&G¾DJFOUMZEFTJHOFEXPSL¿PX\rIBOEPGGT\rBOEPUIFSQSPDFEVSFTDBOFOIBODFPQFSBUJPOTXIJMFTJNVMUBOFPVTMZJNQSPWJOHDMJOJDBMRVBMJUZ³A special type of provider inef!ciency is avoidable errors.PTUPSHBOJ[BUJPOTSFDPHOJ[FBWPJEBCMFFSSPSTBTXBTUFBOEBUUFNQUUPNJOJNJ[FUIFN*OIFBMUIDBSF\rUIFJNQBDUPGFSSPSTHPFTGBSCFZPOE¾OBODJBMJNQMJDBUJPOT\rXJUIFSSPSTSFTVMUJOHJODPNQMJDBUJPOT\rSFBENJTTJPOT\rBEEJUJPOBMQBJOGVMQSPDFEVSFT\rEJTBCJMJUZ±PSFWFOEFBUI'PSUIJTSFBTPO\rUIF

9 DPOWJODJOHFWJEFODF
DPOWJODJOHFWJEFODFGPSVOBDDFQUBCMZIJHISBUFTPGFSSPSQSFTFOUFEJOUIFMJUFSBUVSFJTBNBKPSDPODFSO*OBEEJUJPOUPSFDPHOJ[JOHUIFIVNBODPTUTPGUIFTFFSSPST\rUIFMJUFSBUVSFBMTPBUUFNQUTUPEFTDSJCFBOEFTUJNBUFUIF¾OBODJBMDPTUPGSFMBUFEFYDFTTNFEJDBMTFSWJDFT4FWFSBMUZQFTPGEPDVNFOUFEDPTUTJODMVEF…&YUFOEFEIPTQJUBMTUBZUPUSFBUBWPJEBCMFDPNQMJDBUJPOTPSQSPDFEVSFSFMBUFEJOKVSJFT…3FBENJTTJPOUPUIFIPTQJUBMTIPSUMZGPMMPXJOHEJTDIBSHFUPSFTQPOEUPBOBWPJEBCMFFTDBMBUJPOPGBDPOEJUJPOPSDPNQMJDBUJPO…"DVUFDBSFSFRVJSFEUPUSFBUBDPNQMJDBUJPOSFTVMUJOHGSPNFSSPSTNBEFEVSJOHBOPVUQBUJFOUQSPDFEVSF…5SFBUNFOUGPSBEWFSTFESVHFGGFDUT\rJODMVEJOHESVHESVHJOUFSBDUJPOTBOEBWPJEBCMFSFBDUJPOT Where can $700 billion in waste be cut annually? 11 Considerable evidence supports the extent of waste from provider inef!ciency and errors in healthcare, including the following: …5IPNTPO3FVUFSTIBTDPNQMFUFEUXPTUVEJFTFTUJNBUJOHUIFQPUFOUJBMTBWJOHTGSPNJNQSPWFNFOUJOIPTQJUBMPQFSBUJOHFG¾DJFODZ#PUITUVEJFTDPNQBSFEOBUJPOBMIPTQJUBMQFSGPSNBODFUPBTFUPGIJHIQFSGPSNJOHIPTQJUBMCFODINBSLTBWBJMBCMFJOPVS"$5*0/0*BOE5PQ)PTQJUBMTEBUB…*OUIF¾STUTUVEZ\rJGBMMIPTQJUBMTFYQFSJFODFEUIFMPXFSSBUFPGFYQFOTFJO¿BUJPOFYQFSJFODFECZUIFThomson Reuters 100 Top Hospitals\rOBUJPOBMIPTQJUBMPQFSBUJOHFYQFOTFTXPVMECFSFEVDFECZ$32 billionQFSZFBSBGUFSUISFFZFBST…*OUIFTFDPOETUVEZ\rJGBMMIPTQJUBMTSFEVDFEUIFJSBWFSBHFDPTUUPUIFBWFSBHFDPTUPGUIFNPTUFG¾DJFOUQFSDFOUPGIPTQJUBMT\rPQFSBUJOHFYQFOTFTXPVMECFSFEVDFECZ$73 billionQFSZFBS5IFTFUXPTUVEJFTQSPWJEFBDPOTJTUFOUFTUJNBUFPGUIFNBHOJUVEFPGUIJTXBTUFEVFUPPQFSBUJPOBMJOFG¾DJFODZ…"OBOBMZTJTPGUIFDPTUBTTPDJBUFEXJUIBEWFSTFTBGFUZFWFOUTJOUIF5IPNTPO3FVUFST1SPKFDUFE*OQBUJFOU%BUBCBTF 1*%#\nTVHHFTUTUIBUUIFUPUBMOBUJPOBMDPTUGPSUIFTFFWFOUTJTCJMMJPO…²5IFJNQMFNFOUBUJPOPGBMBCPSBUPSZUFTUTBOEDIFTUSBEJPHSBQITQSFTDSJQUJPOQSPUPDPMXJUIJOPVS*$6JOEVDFEBOJNQPSUBOUDPTUTBWJOH³…²©SFEVDUJPOPGSPVUJOFMBCPSBUPSZUFTUTQFSGPS

10 NBODFXBTPCTFSWFEQ
NBODFXBTPCTFSWFEQFSQBUJFOU*$6EBZ\rSBOHJOHGSPNUPQFSDFOUEFQFOEJOHPOUIFUZQFPGUFTU³…²'PSDIFTUSBEJPHSBQIT\rBQFSDFOUSFMBUJWFSFEVDUJPOXBTPCTFSWFE³13…"MMUIFGPMMPXJOHRVPUBUJPOTUBLFOGSPN²8BTUFBOE*OFG¾DJFODZJOUIF64)FBMUIDBSF4ZTUFN\r$MJOJDBM$BSF"$PNQSFIFOTJWF"OBMZTJTJO4VQQPSUPG4ZTUFNXJEF*NQSPWFNFOUT\r³/FX&OHMBOE)FBMUIDBSF*OTUJUVUF\r'FCSVBSZ…²5BLFOUPHFUIFS\rBWPJEBCMFBEWFSTFUSFBUNFOUFWFOUTBOEIPTQJUBMBDRVJSFEJOGFDUJPOTDPOTFSWBUJWFMZSFTVMUJOBNJOJNVNPG$52.2 billionUIBUBSFXBTUFEFBDIZFBS\rOPUUPNFOUJPOUIFIVNBOUPMMPGUIFTFBWPJEBCMFFWFOUT³…²"EWFSTFUSFBUNFOUFWFOUTBSFXFMMEPDVNFOUFETPVSDFTPGXBTUF4UVEJFTGSPN)BSWBSE.FEJDBM4DIPPMTVHHFTUUIBUBEWFSTFFWFOUTDPOTFSWBUJWFMZBDDPVOUGPSQFSDFOUPGUPUBMIFBMUIDBSFTQFOEJOH\rPS $100 billionQFSZFBS EPMMBST\n\rBOEUIBUalmost half of all adverse events (46.5 percent) are avoidable.…²#FUXFFO¾WFBOEUFOQFSDFOUPGBMMQBUJFOUTBENJUUFEUPBDVUFDBSFIPTQJUBMTBDRVJSFPOFPSNPSFJOGFDUJPOT\rSFTVMUJOHJOBOFTUJNBUFE\rEFBUITFBDIZFBSBOEBOOVBMXBTUFUPUBMJOHBOFTUJNBUFE$4.5 to $5.7 billion per year³…²*O\rIPTQJUBMTJO1FOOTZMWBOJBSFQPSUFE\rIPTQJUBMBDRVJSFEJOGFDUJPOTPGUIFTF\rQFSDFOUPGUIFQBUJFOUTXIPBDRVJSFEUIFJOGFDUJPOEJFE5IFEJSFDUNFEJDBMDPTUBTTPDJBUFEXJUIUIPTFJOGFDUJPOTJO1FOOTZMWBOJBXBT$2 billion³…²#FZPOEUIFJSDPTUJOIVNBOMJWFT\rQSFWFOUBCMFNFEJDBMFSSPSTFYBDUPUIFSTJHOJ¾DBOUUPMMT5IFZIBWFCFFOFTUJNBUFEUPSFTVMUJOUPUBMDPTUT JODMVEJOHUIFFYQFOTFPGBEEJUJPOBMDBSFOFDFTTJUBUFECZUIFFSSPST\rMPTUJODPNF\rBOEIPVTFIPMEQSPEVDUJWJUZ\rBOEEJTBCJMJUZ\nPGCFUXFFO$17 billion and $29 billionQFSZFBSJOIPTQJUBMTOBUJPOXJEF³14 12 Where can $700 billion in waste be cut annually? How prevalent is lack of care coordination? The evidence reveals extensive waste: …3PVHIMZ\rNFEJDBUJPOFSSPSTPDDVSBNPOH.FEJDBSFSFDJQJFOUTJOPVUQBUJFOUDMJOJDTLQSFWFOUBCMF"%&JOKVSJFTBOEEFBUITJOPVUQBUJFOUZFBS³18…²0VSFTUJNBUFTTVHHFTUUIBUFMJNJOBUJOHBWPJEBCMF&%NFSHFODZ%FQBSUNFOU&#x&1.;@耀

11 VTFDPVMETBWFBUMF
VTFDPVMETBWFBUMFBTU$21.4 billionQFSZFBSPOBOBUJPOBMCBTJTJUDPVMEBMTPGSFFVQFNFSHFODZEFQBSUNFOUTUPUBLFDBSFPGUSVFFNFSHFODJFT©³…$PTUGPS²BWPJEBCMFIPTQJUBMJ[BUJPOTPGOVSTJOHIPNFQBUJFOUT³JT$7.5 billionBOOVBMMZ17 …²0OFTUVEZGPVOEUIBUFBDIQSFWFOUBCMF"%&UIBUUPPLQMBDFJOBIPTQJUBMBEEFEBCPVU\rUPUIFDPTUPGUIFIPTQJUBMTUBZ"TTVNJOH\rPGUIFTFFWFOUTFBDIZFBS±BDPOTFSWBUJWFFTUJNBUF±UIFUPUBMBOOVBMDPTUXPVMECF$3.5 billionJOUIJTPOFHSPVQ³15…²1PUFOUJBMMZJOBQQSPQSJBUFNFEJDBUJPO 1*.\nVUJMJ[BUJPOJTBTJHOJ¾DBOUQSFEJDUPSGPSIJHIFSIFBMUIDBSFFYQFOEJUVSFT"DPOTFSWBUJWFFTUJNBUFPGUIFJODSFNFOUBMIFBMUIDBSFFYQFOEJUVSFTSFMBUFEUP1*.VTFJOUIFDPNNVOJUZEXFMMJOHFMEFSMZQPQVMBUJPOXPVMECF$7.2 billionJOUIF6OJUFE4UBUFTJO³16…²'PSFYBNQMF\rNFEJDBMFSSPST±XIJDIDBOJOEJDBUFJOFG¾DJFOUQSPDFTTFT±BSFFTUJNBUFEUPDPTUCFUXFFO$17 billion and $29 billionBOOVBMMZJOUIF6OJUFE4UBUFT©³17 LACK OF CARE COORDINATIONReasonable Range for Annual Waste: $25!$50 Billion 8IFODBSFQSPWJEFSTEPOPUDPPSEJOBUFUIFTFSWJDFTUIFZQSPWJEF\rTFWFSBMUZQFTPGJOFG¾DJFODJFTPDDVSUIBUBSFCPUIDPTUMZBOEQPUFOUJBMMZIBSNGVMUPQBUJFOUT'PSJOTUBODF\rJUJTXBTUFXIFODBSFHJWFSTEVQMJDBUFUFTUTCFDBVTFSFTVMUTSFDPSEFEJOBQBUJFOUµTSFDPSEXJUIPOFQSPWJEFSBSFOPUBWBJMBCMFUPBOPUIFSPSXIFONFEJDBMTUBGGQSPWJEFTJOBQQSPQSJBUFUSFBUNFOUCFDBVTFSFMFWBOUIJTUPSZPGQSFWJPVTUSFBUNFOUDBOOPUCFBDDFTTFE*UJTBMTPXBTUFGVMXIFOQBUJFOUTBSFGPSDFEUPVTFUIFFNFSHFODZSPPNGPSOPOFNFSHFOUDPOEJUJPOTCFDBVTFQSJNBSZDBSFTFSWJDFTBSFVOBWBJMBCMF+VTUBTVOOFDFTTBSZJTPSEFSJOHBWPJEBCMFIPTQJUBMJ[BUJPOTGPSOVSTJOHIPNFQBUJFOUT'JOBMMZ\rCPUIXBTUFGVMBOEQPUFOUJBMMZEBOHFSPVTBSFBEWFSTFESVHSFBDUJPOTUIBUPDDVSXIFOBSFDPSEPGBQBUJFOUµTDVSSFOUNFEJDBUJPOTJTVOBWBJMBCMF Where can $700 billion in waste be cut annually? 13 UNWARRANTED USEReasonable Range For Annual Waste: $250!$325 Billion /FBSMZBMMFYQFSUTBHSFFUIBUBTJHOJ¾DBOUBNPVOUPGEJSFDUDBSFQSPWJEFTOPPSPOMZNBSHJOBMWBMVFUPFJUIFSUIFEJBHOPTJTPGBQBUJFOUµTDPOEJUJPOP

12 SFGGFDUJWFUSFBUNFO
SFGGFDUJWFUSFBUNFOUPGBEJBHOPTFEDPOEJUJPO4VDIDPTUTBSFVOOFDFTTBSZUPIJHIRVBMJUZ\rFGGFDUJWFDMJOJDBMDBSF%BSUNPVUIµT$FOUFSGPSUIF&WBMVBUJWF$MJOJDBM4DJFODFTEF¾OFTUXPTQFDJ¾DDBUFHPSJFTPGVOOFDFTTBSZDBSF²QSFGFSFODFTFOTJUJWF³DBSFBOE²TVQQMZTFOTJUJWF³DBSF5IFQSFWBMFODFBOENBHOJUVEFPGFBDIPGUIFTFDBUFHPSJFTPGVOOFDFTTBSZDBSFJTEFNPOTUSBUFECZNFBTVSJOHUIFTJHOJ¾DBOUWBSJBUJPOJOUIFVTFPGTQFDJ¾DQSPDFEVSFTXJUI.FEJDBSFQBUJFOUTJOEJGGFSFOUHFPHSBQIJDSFHJPOTBOEIPTQJUBMBSFBT5IFEJGGFSFODFTJOVTFBSFOPUFYQMBJOFECZEJGGFSFODFTJOUIFEFNPHSBQIJDTPSSJTLQSP¾MFTPGUIFQPQVMBUJPOTTFSWFEBOEEPOPUSFTVMUJOBOZNFBTVSBCMFEJGGFSFODFTJODMJOJDBMPVUDPNFT190UIFSJOWFTUJHBUPSTBUUFNQUUPNFBTVSFUIFJNQBDUPGFYDFTTJWFFYQPTVSFUPNFEJDBMMJBCJMJUZDMBJNTBTBDBVTFPGPWFSVTFPGTFSWJDFT5IJTQSBDUJDFJTSFGFSSFEUPBT²EFGFOTJWFNFEJDJOF³&YBNQMFTPGUIJTVOXBSSBOUFEVTFPGTFSWJDFTJODMVEF…%JBHOPTUJDMBCPSJNBHJOHUFTUTQFSGPSNFEUPQSPUFDUBHBJOTUNBMQSBDUJDFFYQPTVSF…"TVSHJDBMQSPDFEVSFXJUIBQBUJFOUQSFGFSSFENFEJDBMUSFBUNFOUBMUFSOBUJWF %BSUNPVUIµT²QSFGFSFODFTFOTJUJWFDBSF³\n…"IJHIDPTUEJBHOPTUJDQSPDFEVSFVTFEGPSQBUJFOUTBUMPXSJTLGPSUIFDPOEJUJPO…"EJBHOPTUJDUFTUXJUIOPFYQFDUFEJNQBDUPOUIFDPVSTFPGUSFBUNFOU…5IFJOBQQSPQSJBUFVTFPGBOBOUJCJPUJDGPSBOVQQFSSFTQJSBUPSZWJSBMJOGFDUJPO…*OUFOTJWFOPOQBMMJBUJWFFOEPGMJGFUSFBUNFOU %BSUNPVUIµT²TVQQMZTFOTJUJWFDBSF³\n…#SBOEOBNFESVHQSFTDSJCFEXIFOHFOFSJDPSUIFSBQFVUJDBMUFSOBUJWFTBSFBWBJMBCMF…'BJMVSFUPGPMMPXDPOTFSWBUJWFUSFBUNFOUQSPUPDPMPSGPMMPXBSFDPNNFOEFEDPVSTFPGTVDDFTTJWFUSFBUNFOUFTDBMBUJPOThe Thomson Reuters MarketScan Database provides signi!cant evidence in this category of healthcare waste.5IF5IPNTPO3FVUFST.BSLFU4DBODPNNFSDJBMEBUBCBTFJODMVEFTDMBJNTEBUBGPSBMNPTUNJMMJPOQFPQMF5IFEBUBJTQBSUJDVMBSMZSFQSFTFOUBUJWFPGUIFIFBMUIDBSFFYQFSJFODFTPGFNQMPZFFTPGUIFMBSHFTU64FNQMPZFST5IPNTPO3FVUFSTDBMDVMBUFEUIFDPTUTPGQSPWJEJOH

13 TVSHJDBMQSPDFEVSF
TVSHJDBMQSPDFEVSFTUIBUBSFGSFRVFOUMZJODMVEFEJOMJTUTPGQPUFOUJBMMZPWFSVTFEQSPDFEVSFTJODMVEJOHDPSPOBSZBSUFSZCZQBTTHSBGU\rQFSDVUBOFPVTDPSPOBSZJOUFSWFOUJPO\rIJQBOELOFFSFQMBDFNFOU\r$FTBSFBOTFDUJPO\rIZTUFSFDUPNZ\rUSBOTVSFUISBMSFTFDUJPOPGUIFQSPTUBUF\rEJTLTVSHFSZBOETQJOBMGVTJPO\rBOEJNQMBOUBCMFEF¾CSJMMBUPST8FUIFOBQQMJFEUIJTSFTVMUUPFTUJNBUFUIFDPTUGPSUIFTFQSPDFEVSFTGPSUIFFOUJSFDPNNFSDJBMMZJOTVSFEQPQVMBUJPO6TJOHUIJTBQQSPBDI\rXFFTUJNBUFUIBUBQQSPYJNBUFMZCJMMJPOJTTQFOUBOOVBMMZCZDPNNFSDJBMIFBMUIQMBOTGPSUIFTFQSPDFEVSFT*GFWFOBUIJSEPGUIFTFQSPDFEVSFTJTVOOFDFTTBSZ\rUIJTXPVMETVHHFTUXBTUFPG$10 billion"TJNJMBSBOBMZTJTPGTFWFSBMDMBTTFTPGQPUFOUJBMMZPWFSVTFEQSFTDSJQUJPOESVHTTVHHFTUFEBUPUBM64DPTUPGCJMMJPO\rBUIJSEPGXIJDIXPVMEJOEJDBUFXBTUFPGPWFS$4 billion 14 Where can $700 billion in waste be cut annually? The evidence of waste from unwarranted use of healthcare services comes from a number of sources: …²©DPTUTPGWBSJBUJPOCFUXFFOIJHIBOEMPXVUJMJ[JOHSFHJPOTBQQSPBDIFTQFSDFOUPGUPUBMIFBMUIDBSFTQFOEJOH³…².PSFUIBONJMMJPOIJHIUFDITDBOTBSFEPOFFBDIZFBS\rBOENFEJDBMJNBHJOH\rJODMVEJOH$5\r.3*\rBOE1&5TDBOT\rIBTCBMMPPOFEJOUPBCJMMJPOBZFBSJOEVTUSZJOUIF6OJUFE4UBUFT\rXJUI.FEJDBSFQBZJOHGPSCJMMJPOPGUIBU#VUSFDFOUTUVEJFTTIPXUIBUBTNBOZBTQFSDFOUUPQFSDFOUPGUIFQSPDFEVSFTTIPVMEOFWFSIBWFCFFOEPOFCFDBVTFUIFJSSFTVMUTEJEOPUIFMQEJBHOPTFBJMNFOUTPSUSFBUQBUJFOUT³20…²"UPUBMPGQIZTJDJBOT QFSDFOU\nDPNQMFUFEUIFTVSWFZ/FBSMZBMM QFSDFOU\nSFQPSUFEQSBDUJDJOHEFGFOTJWFNFEJDJOF´"TTVSBODFCFIBWJPSµTVDIBTPSEFSJOHUFTUT\rQFSGPSNJOHEJBHOPTUJDQSPDFEVSFT\rBOESFGFSSJOHQBUJFOUTGPSDPOTVMUBUJPO\rXBTWFSZDPNNPO QFSDFOU\n"NPOHQSBDUJUJPOFSTPGEFGFOTJWFNFEJDJOFXIPEFUBJMFEUIFJSNPTUSFDFOUEFGFOTJWFBDU\rQFSDFOUSFQPSUFEVTJOHJNBHJOHUFDIOPMPHZJODMJOJDBMMZVOOFDFTTBSZDJSDVNTUBODFT³21…²0VSBOBMZTJTPGQFFSSFWJFXFEMJUFSBUVSFTIPXFEUIBUUIFSFJTTUSPOHFWJEFODFUIB

14 UNPTUPGUIFBOUJCJ
UNPTUPGUIFBOUJCJPUJDTQSFTDSJCFEGPSUIFUSFBUNFOUPGUIFTFJOGFDUJPOT FBSJOGFDUJPOT\rTPSFUISPBU\rVQQFSSFTQJSBUPSZJOGFDUJPOT\nBSFVOOFDFTTBSZ\rBTUIFTFDPNNPOJOGFDUJPOTBSFMBSHFMZEVFUPWJSVTFTUIBUBSFOPUTVTDFQUJCMFUPBOUJCJPUJDT5IFEBUBTVHHFTUTUIBUVQUPQFSDFOUPGBOUJCJPUJDQSFTDSJQUJPOTBSFNFEJDBMMZVOOFDFTTBSZBOEDPVMECFBWPJEFE\rSFTVMUJOHJOBOOVBMTBWJOHTPG$1.1 billion.…²5BLFOUPHFUIFS\rUIFJSSFQPSUT %BSUNPVUI.FEJDBM4DIPPM\nSFHBSEJOHWBSJBUJPOJOUIFJOUFOTJUZPGBCSPBESBOHFPGDMJOJDBMTFSWJDFTMFBEVTUPCFMJFWFUIBUUIFDPTUPGQPUFOUJBMMZBWPJEBCMFDMJOJDBMDBSFBQQSPYJNBUFTQFSDFOUPGUPUBMIFBMUIDBSFTQFOEJOH*GUIJTFTUJNBUFJTDPSSFDU\r $600 billion EPMMBST\nDPVMECFTBWFEFBDIZFBSCZVOEFSTUBOEJOHBOEQSFWFOUJOHVOFYQMBJOFEWBSJBUJPOTJODBSFQBUUFSOT³…²"DDPSEJOHUPBSFDFOUTUVEZCZUIF.D,JOTFZ(MPCBM*OTUJUVUF\rEJBHOPTUJDJNBHJOHGSPNDPNQVUFEUPNPHSBQIZ $5\nBOENBHOFUJDSFTPOBODFJNBHJOH .3*\nTDBOTDPOUSJCVUF$26.5 billionJOVOOFDFTTBSZVTFPGIFBMUITFSWJDFT³22…².BOZIZQFSUFOTJWFQBUJFOUTDPVMECFUSFBUFEXJUIJOFYQFOTJWFHFOFSJDNFEJDBUJPOT\rTVDIBTEJVSFUJDTBOE¾STUHFOFSBUJPOCFUBCMPDLFST\rSBUIFSUIBONPSFFYQFOTJWFCSBOEFEBOUJIZQFSUFOTJWFTUIBUBSFUZQJDBMMZQSFTDSJCFE³0VSBOBMZTFTPGUIFFWJEFODFTVHHFTUUIBUBUMFBTU$3 billionDPVMECFTBWFEFBDIZFBSCZTJNQMZNBLJOHMFTTFYQFOTJWFCVUFRVBMMZFGGFDUJWFBOETBGFNFEJDBUJPODIPJDFT³ Where can $700 billion in waste be cut annually? 15 …²-BCPSBUPSZUFTUTBOEQSPDFEVSFTOPUSFDPNNFOEFE %SBOLJOH\nJODMVEFEVSJOBMZTJT 6"T\nJOUFSWFOUJPOTOPUSFDPNNFOEFEJODMVEFEFMFDUSPDBSEJPHSBNT &,(T\nBOE9SBZT3&46-545IFGSFRVFODZPGPSEFSJOHBOZPGUIFUISFFEJBHOPTUJDJOUFSWFOUJPOTSBOHFEGSPNQFSDFOUUPQFSDFOU\rBOEBUMFBTUPOFPGUIFJOUFSWFOUJPOTXBTPSEFSFEQFSDFOUPGUIFUJNF"OOVBMEJSFDUDPTUTGPSUIFUISFFJOUFSWFOUJPOTSBOHFGSPN$47 million to $194 million³23…²"TVSWFZJOUIFJournal of the American Medical AssociationSFMBUFEUIBUQFSDFOUPGIJHISJTLTQFDJBMJTUTJO1FOOTZMWBOJBBENJUUFEU

15 PUIFQSBDUJDF\rBOE
PUIFQSBDUJDF\rBOEQFSDFOUPG.BTTBDIVTFUUTQIZTJDJBOTEJEUIFTBNFJOBTVSWFZ5IFTBNF.BTTBDIVTFUUTTVSWFZTIPXFEUIBUQFSDFOUPGBMMJNBHJOHUFTUTXFSFPSEFSFEGPSEFGFOTJWFQVSQPTFT\rBOEQFSDFOUBOEQFSDFOU\rSFTQFDUJWFMZ\rPGUIPTFTVSWFZFEBENJUUFESFEVDJOHUIFOVNCFSPGIJHISJTLQBUJFOUTUIFZTBXBOEMJNJUJOHUIFOVNCFSPGIJHISJTLQSPDFEVSFTPSTFSWJDFTUIFZQFSGPSNFE%FGFOTJWFNFEJDJOFJTOPUPSJPVTMZIBSEUPRVBOUJGZ\rCVUTPNFFTUJNBUFTQMBDFUIFBOOVBMDPTUBU$100 billion to $200 billionPSNPSF³24…²5IFZGPVOEUIBUMJBCJMJUZSFGPSNTDPVMESFEVDFEFGFOTJWFNFEJDJOFQSBDUJDFT\rMFBEJOHUPBQFSDFOUUPQFSDFOUSFEVDUJPOJONFEJDBMFYQFOEJUVSFTXJUIPVUBOZFGGFDUPONPSUBMJUZPSNFEJDBMDPNQMJDBUJPOT*GUIF,FTTMFSBOE.D$MFMMBOFTUJNBUFTXFSFBQQMJFEUPUPUBM64IFBMUIDBSFTQFOEJOHJO\rUIFEFGFOTJWFNFEJDJOFDPTUTXPVMEUPUBMCFUXFFO$100 billion and $178 billionQFSZFBS³25…²&TUJNBUFTGSPNUIFTFNPEFMTTVHHFTUUIBUMBXTMJNJUJOHNBMQSBDUJDFQBZNFOUTMPXFSTUBUFIFBMUIDBSFFYQFOEJUVSFTCZCFUXFFO 3 percent and 4 percent³26…²0VSSFDFOUTUVEZPGUIFMBSHFTU$BMJGPSOJBIPTQJUBMT UIPTFXJUITVG¾DJFOUOVNCFSTPGQBUJFOUTUPBMMPXBDDVSBUFNFBTVSFNFOUPGSFTPVSDFVTF\nTIPXFEUIBU.FEJDBSFTQFOEJOHQFSQBUJFOUJOUIFMBTUUXPZFBSTPGMJGFSBOHFEGSPN\rUP\r5IFQPUFOUJBMTBWJOHTBSFFOPSNPVT'PSFYBNQMF\rPWFSUIF¾WFZFBSQFSJPEPGUIJTTUVEZ \n\r.FEJDBSFDPVMEIBWFTBWFE$1.7 billion in the Los Angeles marketBMPOFJGDBSFQBUUFSOTJO-PT"OHFMFTNJSSPSFEUIPTFPG4BDSBNFOUP³27 16 Where can $700 billion in waste be cut annually? PREVENTABLE CONDITIONS AND AVOIDABLE CAREReasonable Range For Annual Waste: $25!$50 Billion 5JNFMZBDDFTTUPRVBMJUZPVUQBUJFOUDBSFDBOQSFWFOUUIFOFFEGPSIPTQJUBMJ[BUJPOPSPUIFSBDVUFDBSF FH\rFNFSHFODZSPPNDBSF\n*OBOFGGPSUUPSFEVDFXBTUFJOUIJTBSFB\rUIF"HFODZGPS)FBMUIDBSF3FTFBSDIBOE2VBMJUZ ")32\nIBTEF¾OFEBTFUPGNFBTVSFTPGQSFWFOUBCMFVUJMJ[BUJPOCBTFEPOJEFOUJGZJOH²"NCVMBUPSZ$BSF4FOTJUJWF$POEJUJPOT³ "$4$\n285IJTHVJEFMJOFJTBHPPEQMBDFUPCFHJOBOFYQMPSBUJPOPG

16 QSFWFOUBCMFDPOEJUJ
QSFWFOUBCMFDPOEJUJPOTBOEBWPJEBCMFDBSFBJNFEBUSFEVDJOHXBTUF How widespread is waste from preventable conditions and avoidable care? The evidence reveals some interesting statistics: …²'PSFYBNQMF\rSFTFBSDITIPXTUIBUIPTQJUBMBENJTTJPOTQFSFWFSZ\rQFPQMFBHFEUPJOUIF6OJUFE4UBUFTBSFGPSVODPOUSPMMFEEJBCFUFT"HPBMPG)FBMUIZ1FPQMF\rUIF%FQBSUNFOUPG)FBMUIBOE)VNBO4FSWJDFTµ ))4\nSPBENBQGPSJNQSPWJOH"NFSJDBOTµIFBMUI\rJTUPSFEVDFIPTQJUBMJ[BUJPOSBUFTGPSVODPOUSPMMFEEJBCFUFTGPSQFSTPOTJOUIJTBHFCSBDLFUUPQFS\rQFPQMF\rXIJDIIFBMUIFYQFSUTBHSFFDBOCFBDDPNQMJTIFECZJNQSPWJOHUIFRVBMJUZPGPVUQBUJFOUEJBCFUFTDBSFBOEBDDFTTUPTVDITFSWJDFT³35…²5IFOVNCFSPGIPTQJUBMJ[BUJPOTGPSQPUFOUJBMMZBWPJEBCMFDPOEJUJPOTJODSFBTFEGSPNNJMMJPOJOUPNJMMJPOJO5IJTXBTQFSDFOUPGBMMIPTQJUBMJ[BUJPOTJO FYDMVEJOHXPNFOXJUIEFMJWFSJFT\rOFXCPSOJOGBOUT\rBOEQTZDIJBUSJDBENJTTJPOT\n\rCVUQFSDFOUJO³29…²5PUBMOBUJPOBMDPTUTBTTPDJBUFEXJUIQPUFOUJBMMZBWPJEBCMFIPTQJUBMJ[BUJPOT\rWBMVFPG29.6 billion³30…²*O\rIPTQJUBMDPTUTGPSQPUFOUJBMQSFWFOUBCMFDPOEJUJPOTUPUBMFEOFBSMZ$30.8 billion±POFJOFWFSZEPMMBSTPGUPUBMIPTQJUBMFYQFOEJUVSF0OFJO¾WF QFSDFOU\n.FEJDBSFBENJTTJPOTXBTGPSBQPUFOUJBMMZQSFWFOUBCMFDPOEJUJPO³31…²"OBWFSBHFIPTQJUBMTUBZDPTUT\rQFSBENJTTJPO\rBOEFWFOB¾WFQFSDFOUEFDSFBTFJOIPTQJUBMJ[BUJPOTGPS"$4$TXPVMETBWFNPSFUIBO$1.3 billionJOBOOVBMJOQBUJFOUDPTUT³32…²'PSFYBNQMF\rJGUIFOVNCFSPGQSFWFOUBCMFIPTQJUBMJ[BUJPOTGPSUIFDPOEJUJPOTTUVEJFEXFSFUPEFDSFBTFCZKVTUQFSDFOU\rUIFTBWJOHTJOIPTQJUBMDIBSHFTXPVMECFNPSFUIBO$280 million³33…²©JOBQQSPQSJBUFNBOBHFNFOUPGIZQFSUFOTJPODPOUSJCVUFTTVCTUBOUJBMMZUPIFBMUIDBSFSFTPVSDFVUJMJ[BUJPOBOEBTTPDJBUFEDPTUTJOUIF6OJUFE4UBUFT5IFPWFSBMMQSFWBMFODFPGIZQFSUFOTJPOXBTFTUJNBUFEBUQFSDFOU\rXJUIQFSDFOUPGJEFOUJ¾FEQBUJFOUTUSFBUFEJOBQQSPQSJBUFMZ5IFQFSQFSTPODPTUGPSJOBQQSPQSJBUFUSFBUNFOUXBT\rBOEUIFUPUBMO

17 BUJPOBMDPTUXBTBQQ
BUJPOBMDPTUXBTBQQSPYJNBUFMZ $13 billion³57 Where can $700 billion in waste be cut annually? 17 …²3FHVMBSVTFPGJOIBMFETUFSPJETXPVMESFEVDFIPTQJUBMJ[BUJPOTCZQFSDFOUBOEDPVMEBWPJEEJSFDUNFEJDBMDPTUTUPUBMJOH$2.5 billionFBDIZFBS³…²"OFTUJNBUFE$9.5 billionJODIBSHFTJODVSSFEJOSVSBMIPTQJUBMTOBUJPOXJEFJOXBTGPVOEUPCFBTTPDJBUFEXJUIIPTQJUBMJ[BUJPOTEVFUP"$4$T0VS¾OEJOHTTVHHFTUUIBUUIFTNBMMFSBSVSBMIPTQJUBM\rUIFHSFBUFSUIFQPSUJPOPGJUT¾OBODJBMSFTPVSDFTVTFEUPUSFBUQBUJFOUTXJUI"$4$³34…²5IFQSPQPSUJPOPG")$TBTTFTTFEBTavoidable varies from 13 percent to 46 percentEFQFOEJOHPOUIFTPVSDF"EPMFTDFOUT\rDIJMESFOXJUIBTUINB\rDIJMESFOGSPNXPSLJOHQPPSGBNJMJFT\rBOEVOJOTVSFEDIJMESFOBSFBUHSFBUFTUSJTLGPSBWPJEBCMFIPTQJUBMJ[BUJPOT.BOZQFEJBUSJDIPTQJUBMJ[BUJPOTNJHIUCFBWPJEFEJGQBSFOUTBOEDIJMESFOXFSFCFUUFSFEVDBUFEBCPVUUIFDIJMEµTDPOEJUJPO\rNFEJDBUJPOT\rUIFOFFEGPSGPMMPXVQDBSF\rBOEUIFJNQPSUBODFPGBWPJEJOHLOPXOEJTFBTFUSJHHFST³36…²5IFFDPOPNJDCVSEFOBTTPDJBUFEXJUIBWPJEBCMFIPTQJUBMJ[BUJPOTEVFUPEFIZESBUJPOJOFMEFSMZQBUJFOUTXBTTVCTUBOUJBM*O\rUIFQPUFOUJBMOBUJPOBMTBWJOHGSPNBWPJEBCMFIPTQJUBMJ[BUJPOTJOUIFTFQBUJFOUTDPVMEIBWFCFFOBTNVDIBT$1.14 billion³37…²©XFGPVOEUIBUJO¿BUJPOBEKVTUFETQFOEJOHPOOVSTJOHIPNFIPTQJUBMJ[BUJPOTJODSFBTFEQFSDFOUGSPNUISPVHI#Z\rBHHSFHBUFTQFOEJOHUPUBMFESPVHIMZ$972 million\rPGXIJDIQFSDFOUXBTBUUSJCVUBCMFUPBNCVMBUPSZDBSFTFOTJUJWFDPOEJUJPOT³58…²&GGPSUTUPSFEVDFUIFOVNCFSPG.FEJDBSFCFOF¾DJBSJFTXIPFYQFSJFODFBQSFWFOUBCMFIPTQJUBMJ[BUJPONBZCFDPTUFGGFDUJWFBTUIFTFCFOF¾DJBSJFTNBZBDDPVOUGPSVQUP 17.4 percent of Medicare!s reimbursementGPSJOQBUJFOU\rPVUQBUJFOU\rBOEQIZTJDJBOTFSWJDFTJOPVSEBUBTFU³38…²5IFUPUBMFTUJNBUFEDPTUPGEJBCFUFTJOJTCJMMJPO\rJODMVEJOHCJMMJPOJOFYDFTTNFEJDBMFYQFOEJUVSFTBOECJMMJPOJOSFEVDFEOBUJPOBMQSPEVDUJWJUZ.FEJDBMDPTUTBUUSJCVUFEUPEJBCFUFTJODMVEFCJMMJPOGPSDBSFUPEJSFDUMZUSFBUEJBCFUFT\rCJMMJPOUPUSFBUUIFQ

18 PSUJPOPGEJBCFUFTS
PSUJPOPGEJBCFUFTSFMBUFEDISPOJDDPNQMJDBUJPOTUIBUBSFBUUSJCVUFEUPEJBCFUFT\rBOE$31 billonJOFYDFTTHFOFSBMNFEJDBMDPTUT³39…²©UPUBMFTUJNBUFEOBUJPOXJEFDPTUTGPSTIPSUUFSNDPNQMJDBUJPOTBOEVODPOUSPMMFEEJBCFUFTIPTQJUBMJ[BUJPOTUPUBMFEPWFS$1.3 billion³40 Timely access to quality outpatient care can prevent the need for hospitalization or other acute care. 18 Where can $700 billion in waste be cut annually? FRAUD AND ABUSE Reasonable Range for Annual Waste: $125!$175 Billion ²5IF'FEFSBM#VSFBVPG*OWFTUJHBUJPO '#*\nFTUJNBUFTUIBUGSBVEVMFOUCJMMJOHTUPQVCMJDBOEQSJWBUFIFBMUIDBSFQSPHSBNTBSFQFSDFOUPGUPUBMIFBMUITQFOEJOH\rPS°CJMMJPOJO¾TDBMZFBS³41²'SBVEBOEBCVTF³PDDVQJFTUIFFYUSFNFFOEPGUIFDPOUJOVVNPGBQQSPQSJBUFOFTTPGVTFBOEQPUFOUJBMXBTUF8IJMFBSHVNFOUTDBOCFNBEFBCPVUUIFBQQSPQSJBUFOFTTPGTPNFPGUIFDBSFEFTDSJCFEJOUIFQSFWJPVTTFDUJPO\rBOE\rUIFSFGPSF\rJUTDMBTTJ¾DBUJPOBTXBTUF\rOPSFBTPOBCMFBSHVNFOUDBOCFNBEFGPSUIFDPOUSJCVUJPOPGGSBVEBOEBCVTFUPRVBMJUZPGDBSFPSPVUDPNFT5IFZBSFDBTFTPGJOUFOUJPOBMNJTSFQSFTFOUBUJPOSFTVMUJOHJOFYDFTTQBZNFOU\rJODMVEJOHCJMMJOHGPSTFSWJDFTOFWFSSFOEFSFEBOEUIFLOPXJOHQSPWJTJPOPGVOOFDFTTBSZDBSF.PTUGSBVEVMFOUBOEBCVTJWFQSBDUJDFTTJNQMZBEEDPTUXJUIOPWBMVF\rCVUPUIFSTBDUVBMMZFYQPTFQBUJFOUTUPUIFSJTLBTTPDJBUFEXJUIVOOFDFTTBSZQSPDFEVSFT1SBDUJDFTMFBEJOHUPXBTUFJODMVEF…5IFJOUFOUJPOBMQSPWJTJPOPGVOOFDFTTBSZPSJOBQQSPQSJBUFTFSWJDFT…#JMMJOHGPSTFSWJDFTOFWFSQSPWJEFE\rPGUFOXJUIQBUJFOUTµQBSUJDJQBUJPOJOUIFGSBVE\rPGUFOGPSEFDFBTFEQBUJFOUT….JTSFQSFTFOUBUJPOPGUIFDPTUPGDBSFCZJOTVSFSTUPHSPVQQMBOTQPOTPST…,JDLCBDLTGPSSFGFSSBMTGPSVOOFDFTTBSZTFSWJDFT….JTCSBOEJOHPGBESVHCZBQIBSNBDFVUJDBMDPNQBOZ…"CVTFPGUIFIFBMUIDBSFTZTUFNCZQBUJFOUTUPSFDFJWFIBSNGVMTFSWJDFT\rTVDIBT.FEJDBJESFDJQJFOUTXJUIESVHBEEJDUJPOTFOSPMMJOHJONVMUJQMFTUBUFT Most fraudulent and abusive practices simply add cost with no value, but others actually expose patients to the risk associated with unnecessary procedures. Where can $700 billion in waste be cut annually? 19 Evidence of fraud and abuse reveals an area where waste could de!nitely be reduced, saving money and ultimately providing better care and se

19 rvice to patients: …²©JO
rvice to patients: …²©JO\rXIFOUIF64TQFOUOFBSMZUSJMMJPOPOIFBMUIDBSFBOECPUIQVCMJDBOEQSJWBUFJOTVSFSTQSPDFTTFENPSFUIBOCJMMJPOIFBMUIJOTVSBODFDMBJNT\rGSBVEXBTFTUJNBUFEUPSFBDIBTNVDIBTQFSDFOUPGBOOVBMIFBMUIDBSFTQFOEJOH8JUIUIJTSBUF\rUIFMPTTFTJOXPVMEIBWFCFFONPSFUIBO$220 billion±PSFOPVHIUPDPWFSUIFVOJOTVSFE±JGFTUJNBUFTGSPNHPWFSONFOUBOEMBXFOGPSDFNFOUBSFVTFE³42…²5IF/BUJPOBM)FBMUIDBSF"OUJ'SBVE"TTPDJBUJPO\rBOPSHBOJ[BUJPOPGBCPVUQSJWBUFJOTVSFSTBOEQVCMJDBHFODJFT\rFTUJNBUFTUIBUTPNF$60 billion BCPVUQFSDFOUPGUPUBMBOOVBMIFBMUIDBSFTQFOEJOH\nJTMPTUUPGSBVEFWFSZZFBS\rCVUUIBU¾HVSFJTDPOTJEFSFEDPOTFSWBUJWF*O\rHPWFSONFOUXJEF²JNQSPQFSQBZNFOUT³DPTUUIF645SFBTVSZ$72 billion\rPSBCPVUQFSDFOU\rPGUPUBMPVUMBZTGPSUIFSFMBUFEQSPHSBNT³43 20 Where can $700 billion in waste be cut annually? SHOULD THESE BE CONSIDERED WASTE? "MUIPVHISFQSFTFOUJOHTJHOJ¾DBOUDPTUT\rUXPDBUFHPSJFTPGQPUFOUJBMFYDFTTIFBMUIDBSFFYQFOTFIBWFCFFOUSFBUFEEJGGFSFOUMZJONPTUEJTDVTTJPOTBCPVUIFBMUIDBSFTZTUFNXBTUF#PUIBSFPGUFODPOTJEFSFEBTPQQPSUVOJUJFTUPSFEVDFIFBMUIDBSFTQFOEJOHXJUIPVUIBWJOHBOFHBUJWFJNQBDUPOPVSQPQVMBUJPOµTIFBMUI/FJUIFS\rIPXFWFS\rSFQSFTFOUTBOPQQPSUVOJUZJNNFEJBUFMZUPSFEVDFDPTUTCZFJUIFSBQQMZJOHSFTPVSDFTNPSFFG¾DJFOUMZPSEJTDPOUJOVJOHVOOFDFTTBSZTFSWJDFTBOEQBZNFOUT#PUIIBWFTJHOJ¾DBOUDVMUVSBMDIBSBDUFSJTUJDTPSQSFDFEFOUT'JSTU\rUIFMJUFSBUVSFSFQPSUTFYUFOTJWFFWJEFODFUIBUTFWFSBMCFIBWJPST\rDPNNPOJOUIFQPQVMBUJPO\rBEETJHOJ¾DBOUDPTUUPIFBMUIDBSF5IFTFJODMVEFBMDPIPMJTN\rTVCTUBODFBCVTF\rVTFPGUPCBDDP\rBOEMBDLPGFYFSDJTFBOEPWFSFBUJOH\rXJUISFTVMUJOHPCFTJUZ4FDPOE\rGPSNBOZZFBST\rFDPOPNJTUTIBWFTVHHFTUFEUIBUUIFNPTUTJHOJ¾DBOUEJGGFSFODFJOFYQFOEJUVSFTPOIFBMUIDBSFCFUXFFOUIF64BOEPUIFSEFWFMPQFEDPVOUSJFTJTUIFSFMBUJWFMZIJHIQSJDFPGTFSWJDFTJOUIF644PNFFWFOBSHVFUIBUVTFPGTFSWJDFTJTBDUVBMMZMPXFSJOUIF64BOEQSJDFBMPOFJTUIFDBVTFINCREASED DISEASE DUE T

20 O MODIFIABLE BEHAVIORS*UTFFNT
O MODIFIABLE BEHAVIORS*UTFFNTSFBTPOBCMFUPDPOTJEFSUIFDPTUTPGUSFBUJOHBQSFWFOUBCMFDPOEJUJPOBTXBTUF&YQFSUTBHSFFUIBUNBOZDPOEJUJPOTDPVMECFBWPJEFECZFOHBHJOHJOBIFBMUIJFSMJGFTUZMF)PXFWFS\rNPTUFTUJNBUFTPGIFBMUIDBSFTZTUFNXBTUFEPOPUJODMVEFUIJTDBUFHPSZ\rTJODFUIFJNQBDUPGUIFTFCFIBWJPSTJTDPOTJEFSFEPVUTJEFPGUIFEJSFDUDPOUSPMBOESFTQPOTJCJMJUZPGUIFIFBMUIDBSFTZTUFN5IFMJUFSBUVSFEPFTEFNPOTUSBUFUIFIJHIFSMJGFUJNFDPTUTPGIFBMUIDBSFGPSQFSTPOTXIPNBJOUBJOVOIFBMUIZMJGFTUZMFT.BOZIFBMUIQMBOTBOEQMBOTQPOTPSTIBWFSFDPHOJ[FEUIFPQQPSUVOJUZUPSFEVDFUIFJSDPTUT\rCPUIJONFEJDBMDBSFBOEJOFNQMPZNFOUSFMBUFEDPTUTTVDIBTBCTFOUFFJTNBOEEJTBCJMJUZ\rCZFODPVSBHJOHBOETVQQPSUJOHNFNCFSMJGFTUZMFDIBOHFT*UJTEJG¾DVMUUPUSFBUTVDIDPTUTTFQBSBUFMZGSPNFYQFOTFTEFTDSJCFEJOUIFPUIFSDBUFHPSJFT\rTJODFTJNQMZSFEVDJOHUIFQSFWBMFODFPGUIFTFDPOEJUJPOTXPVMEFMJNJOBUFNVDIPGUIBUXBTUF'PSFYBNQMF\rUIFFYJTUJOHXBTUFJOUSFBUJOHDPSPOBSZBSUFSZEJTFBTF FH\rJOFG¾DJFOUQSPWJEFST\rVOOFDFTTBSZQSPDFEVSFT\rBWPJEBCMFDPNQMJDBUJPOT\nXPVMECFSFEVDFETJNQMZCZSFEVDJOHUIFJODJEFODFPGUIFDPOEJUJPOUISPVHICFUUFSMJGFTUZMF*GUIJTQBQFSXFSFJEFOUJGZJOHBOERVBOUJGZJOHPQQPSUVOJUJFTUPSFEVDFIFBMUIDBSFTZTUFNDPTUTSBUIFSUIBOUIFMFWFMPGTZTUFNXBTUFJOUSFBUJOHFYJTUJOHIFBMUIDPOEJUJPOT\rUIJTDPTUXPVMECFJODMVEFEJOUIFFTUJNBUF)PXFWFS\rXFXJMMTBUJTGZPVSTFMWFTIFSFCZTJNQMZJEFOUJGZJOHUIJTBTBTJHOJ¾DBOUPQQPSUVOJUZGPSSFEVDJOHDPTUTCZSFEVDJOHUIFSFBMOFFEGPSIFBMUIDBSF5IPVHIUIJTBSFBPGXBTUFJTOPUJODMVEFEBNPOHPVSTJYDBUFHPSJFT\rJUQSFTFOUTBOPQQPSUVOJUZGPSBOOVBMavoidable costs of between $150-$200 billion. Where can $700 billion in waste be cut annually? 21 Increased disease due to modi!able behaviors take a toll on health in the United States. The evidence con!rms the high cost of poor choices:…0CFTJUZBOE1IZTJDBM*OBDUJWJUZ ²8FFTUJNBUFUIBUQFSNBOFOULDBMSFEVDUJPOTJOEBJMZJOUBLFXPVMEFMJNJOBUFBQQSPYJNBUFMZNJMMJPODBTFTPGPWFSXFJHIUPCFTJUZBOETBWFCJMMJPOBOOVBMMZ.PEFTUUPBHHSFTTJW

21 FDIBOHFTJOEJFUDB
FDIBOHFTJOEJFUDBOJNQSPWFIFBMUIBOESFEVDFBOOVBMOBUJPOBMNFEJDBMFYQFOEJUVSFTCZ$60 billion to $120 billion³45²8FGPVOEUIBUUIFJODSFBTFEQSFWBMFODFPGPCFTJUZJTSFTQPOTJCMFGPSBMNPTUCJMMJPOPGJODSFBTFENFEJDBMTQFOEJOHUISPVHI\rJODMVEJOH$7 billionJO.FEJDBSFQSFTDSJQUJPOESVHDPTUT8FFTUJNBUFUIBUUIFNFEJDBMDPTUTPGPCFTJUZDPVMEIBWFSJTFOUP$147 billion per year by 2008³46²1IZTJDBMJOBDUJWJUZ\rPWFSXFJHIU\rBOEPCFTJUZXFSFBTTPDJBUFEXJUIQFSDFOU QFSDFOUDPO¾EFODFJOUFSWBMက$*\rQFSDFOU°QFSDFOU\nPGIFBMUIQMBOIFBMUIDBSFDIBSHFTBOE27 percent °QFSDFOU$*\rQFSDFOU°QFSDFOU\nPGOBUJPOBMIFBMUIDBSFDIBSHFT³47²5IFEJSFDUDPTUTPGMBDLPGQIZTJDBMBDUJWJUZ\rEF¾OFEDPOTFSWBUJWFMZBTBCTFODFPGMFJTVSFUJNFQIZTJDBMBDUJWJUZ\rBSFBQQSPYJNBUFMZCJMMJPOEPMMBSTPSQFSDFOUPGUIF64IFBMUIDBSFFYQFOEJUVSFT%JSFDUDPTUTGPSPCFTJUZEF¾OFEBTCPEZNBTTJOEFYHSFBUFSUIBO\rJOEPMMBST\rUPUBM70 billion dollars5IFTFDPTUTBSFJOEFQFOEFOUPGUIPTFSFTVMUJOHGSPNMBDLPGBDUJWJUZ³48²5IFUPUBMNFEJDBMFYQFOEJUVSFPGQFSTPOTXJUIDBSEJPWBTDVMBSEJTFBTFXBT64CJMMJPOEPMMBST\rPGXIJDI645.4 billion dollars QFSDFOU\nXBTBTTPDJBUFEXJUIJOBDUJWJUZ³49 …4NPLJOH ²4NPLJOHDPTUTUIFOBUJPOCJMMJPOFBDIZFBSJOIFBMUIDPTUTBOEMPTUQSPEVDUJWJUZ&DPOPNJDDPTUTEVSJOHUIFTBNFQFSJPEXFSFCJMMJPOJOQSPEVDUJWJUZMPTTFTGSPNEFBUIT BWFSBHFGPS°\nBOE$75.5 billionJOFYDFTTNFEJDBMFYQFOEJUVSFTJO\rGPSBUPUBMPGNPSFUIBOCJMMJPO\rBDDPSEJOHUPUIFSFQPSU5IFSFQPSUFENFEJDBMBOEQSPEVDUJWJUZMPTTFTXFSFMBSHFSUIBOQSFWJPVTFTUJNBUFTPGCJMMJPOBOECJMMJPO\rSFTQFDUJWFMZ³50²5IFTNPLJOHBUUSJCVUBCMFGSBDUJPOGPSBMMTUBUFTXBTQFSDFOU QFSDFOUDPO¾EFODFJOUFSWBM\rQFSDFOU°QFSDFOU\n.FEJDBJETNPLJOHBUUSJCVUBCMFFYQFOEJUVSFTSBOHFEGSPNNJMMJPO 8ZPNJOH\nUPCJMMJPO /FX:PSL\nJOBOEUPUBMFE$22 billionOBUJPOXJEF³51 22 Where can $700 billion in waste be cut annually? …"MDPIPM$POTVNQUJPO ²"MDPIPMDPOTVNQUJPOJO$BMJGPSOJBMFEU

22 PBOFTUJNBUFE\r
PBOFTUJNBUFE\rEFBUITBOE\rBMDPIPMSFMBUFEQSPCMFNT\rTVDIBTDSJNFBOEJOKVSZ\rJO5IFFDPOPNJDDPTUPGUIFTFQSPCMFNTJTFTUJNBUFEBUCFUXFFOCJMMJPOBOECJMMJPO0VSNBJOFTUJNBUFJTCJMMJPO\rPGXIJDI$5.4 billionXBTGPSNFEJDBMBOENFOUBMIFBMUITQFOEJOH\rCJMMJPOJOXPSLMPTTFT\rBOECJMMJPOJODSJNJOBMKVTUJDFTQFOEJOH\rQSPQFSUZEBNBHF\rBOEQVCMJDQSPHSBNDPTUT³52 …-BDLPG&YDFSDJTF ²/FBSMZQFSDFOUPGEFQSFTTJPOBOEBOYJFUZBOEQFSDFOUPGDPMPODBODFS\rIFBSUEJTFBTF\rPTUFPQPSPTJT\rBOETUSPLFDBTFTXFSFBUUSJCVUBCMFUPQIZTJDBMJOBDUJWJUZ)FBSUEJTFBTFXBTUIFNPTUFYQFOTJWFPVUDPNFPGQIZTJDBMJOBDUJWJUZXJUIJOUIFIFBMUIQMBOQPQVMBUJPO NJMMJPOIFBMUIQMBONFNCFST\n\rDPTUJOH64EPMMBSNJMMJPOJO5PUBMIFBMUIQMBOFYQFOEJUVSFTBUUSJCVUBCMFUPQIZTJDBMJOBDUJWJUZXFSF64EPMMBS83.6 million\rPS64EPMMBSQFSNFNCFS³53 HIGH PRICE OF MEDICAL SERVICES .BOZFYQFSUTCFMJFWFPOFPGUIFQSJNBSZSFBTPOTIFBMUIDBSFDPTUTNPSFJOUIF64UIBOJOPUIFSDPVOUSJFTJTUIBUNFEJDBMTFSWJDFTBSFTJNQMZQSJDFEIJHIFSJOUIF645IFZBSHVFUIBUUIFQVCMJDµTMBDLPGNBSLFUQPXFS±UIFBCJMJUZUPESJWFQSJDFCBTFEPOTVQQMZBOEEFNBOE\rBTXJUINPTUPUIFSQSPEVDUTBOETFSWJDFT±JTUIFDBVTFPGIJHIQSJDFTJOQIZTJDJBOTFSWJDFT\rIPTQJUBMTFSWJDFT\rBOEQSFTDSJQUJPOESVHT.BOZFYQFSUTDPNQBSFUIFJO¿BUFEQSJDFTGPSTQFDJBMJTUQFSGPSNFEQSPDFEVSFTUPUIFVOEFSWBMVFEDPHOJUJWFTFSWJDFTPGQSJNBSZDBSFQIZTJDJBOTBOETVHHFTUUIBUOPUPOMZEPUIFTFQSJDFTBEEDPTU\rCVUUIFZFODPVSBHFPWFSVTFPGUIFTFTFSWJDFTBTEFTDSJCFEJOBQSFWJPVTXBTUFDBUFHPSZ4PNFPGUIFIJHIQSJDFTNBZCFEVFUPTZTUFNJOFG¾DJFODJFTEJTDVTTFEJOBQSFWJPVTDBUFHPSZ FH\rIPTQJUBMPQFSBUJPOBMJOFG¾DJFODJFT\rBENJOJTUSBUJWFJOFG¾DJFODJFT\n.BOZFYQFSUTGPDVTPOUIFIJHIQSJDFTPGQSFTDSJQUJPOESVHTJOUIF64DPNQBSFEUPPUIFSDPVOUSJFT4PNFDPVOUFSUIBUIJHIFSQSJDFTFODPVSBHFBOEGVOEJNQPSUBOUSFTFBSDIBOEEFWFMPQNFOUPGOFX\rWBMVBCMFESVHT0UIFST\r

23 IPXFWFS\rDMBJNUIB
IPXFWFS\rDMBJNUIBUNVDIEFWFMPQNFOUTJNQMZSFTVMUTJOOFX²NFUPP³CSBOEOBNFESVHTUIBUBEEMJUUMFDMJOJDBMBEWBOUBHFPWFSFYJTUJOHESVHT\rCVUJODSFBTFQIBSNBDFVUJDBMQSP¾UTUISPVHIBHHSFTTJWFNBSLFUJOHUPQIZTJDJBOTBOEUIFQVCMJD Thomson Reuters study PGUIFFGGFDUTPGDPNQFUJUJPOPOIPTQJUBMQSJDFT\rQVCMJTIFECZUIF)FBMUIDBSF'JOBODJBM.BOBHFNFOU"TTPDJBUJPO\rGPVOEUIBUIPTQJUBMTFSWJDFTTIPXXJEFSBOHFTJOQSJDFXJUIJOBTQFDJ¾DHFPHSBQIZ²*UJTOPUVOVTVBMGPSUIFWBSJBUJPOJOIPTQJUBMQSJDFTUPSFBDIQFSDFOUPSNPSF'PSFYBNQMF\rUIFQSJDFTPGCSBJO.3*TJO"UMBOUBWBSZQFSDFOUBSPVOEBNFEJBOPG\r*GHBTPMJOFQSJDFTTIPXFEBTJNJMBSBNPVOUPGWBSJBUJPO\rQSJDFTXPVMESBOHFGSPNUPXIFOUIFNFEJBOJTBUQFSHBMMPO³54 Where can $700 billion in waste be cut annually? 23 The following evidence indicates that medical services and pharmaceuticals are overpriced in the United States …²5IFSBUJPPGUIFBWFSBHFJODPNFPG64QIZTJDJBOTUPBWFSBHFFNQMPZFFDPNQFOTBUJPOGPSUIF6OJUFE4UBUFTBTBXIPMFXBTBCPVU(FSNBOZµTXBTUIFOFYUIJHIFTU\rBUPOMZ$BOBEB\r"VTUSBMJB\r4XJU[FSMBOE\r'SBODF\r4XFEFO\rBOEUIF6OJUFE,JOHEPN\r³55…²5IFEBUBTIPXUIBUUIF6OJUFE4UBUFTTQFOETNPSFPOIFBMUIDBSFUIBOBOZPUIFSDPVOUSZ)PXFWFS\rPONPTUNFBTVSFTPGIFBMUITFSWJDFTVTF\rUIF6OJUFE4UBUFTJTCFMPXUIF0&$%NFEJBO5IFTFGBDUTTVHHFTUUIBUUIFEJGGFSFODFJOTQFOEJOHJTDBVTFENPTUMZCZIJHIFSQSJDFTGPSIFBMUIDBSFHPPETBOETFSWJDFTJOUIF6OJUFE4UBUFT³56…²5IFSFTFBSDIFSTFTUJNBUFEUIBU"NFSJDBOTQBJEQFSDFOUNPSFQFSDBQJUBUIBO(FSNBOTEJECVUSFDFJWFEQFSDFOUGFXFSSFBMIFBMUIDBSFSFTPVSDFT"TJNJMBSDPNQBSJTPOSFWFBMFEUIBUUIF64TZTUFNVTFEBCPVUQFSDFOUNPSFJOQVUTQFSDBQJUBUIBOXBTVTFEJOUIF#SJUJTITZTUFNBOETQFOUBCPVUQFSDFOUNPSFQFSDBQJUBPOIJHIFSQSJDFT³56…²©'VDITBOE)BIOGPVOEUIBU²64GFFTGPSQSPDFEVSFTBSFNPSFUIBOUISFFUJNFTBTIJHIBT$BOBEJBOGFFT&#xBO;àUIFEJGGFSFODFJOGFFTGPSFWBMVBUJPOBOENBOBHFNFOUTFSWJDFTJTBCPVUQFSDFOU³56…²#Z

24 UIFTFNPTUDPNQSFIF
UIFTFNPTUDPNQSFIFOTJWFJOEFYFT\r+BQBOµTESVHQSJDFTBSFIJHIFTU\rGPMMPXFECZ64QSJDFT$BOBEBµTQSJDFTBSFMPXFTUQFSDFOUMPXFSUIBO64QSJDFTOFUPGEJTDPVOUT\rBOEQFSDFOUMPXFSJHOPSJOHEJTDPVOUT1SJDFTJO(FSNBOZ\r*UBMZ\rBOEUIF6OJUFE,JOHEPNBSFMFTTUIBOQFSDFOUMPXFSUIBO64QSJDFT\rOFUPGEJTDPVOUT\rXIFSFBTQSJDFTJO'SBODFBSFQFSDFOUMPXFS³596TJOHUIFThomson Reuters MarketScanEBUBCBTF\rBTJNQMFDPNQBSJTPOBDSPTTHFPHSBQIJDSFHJPOTPGUIFEJGGFSFODFJOBWFSBHFQSJDFGPSUIFTBNFTFSWJDFCFUXFFOIPTQJUBMPVUQBUJFOUEFQBSUNFOUTBOEGSFFTUBOEJOHGBDJMJUJFTTVHHFTUTUIBUUIFIPTQJUBMQSJDFBEWBOUBHFJODSFBTFTXJUIBSJTFJOUIFNBSLFUEPNJOBODFPGIPTQJUBMT5IJT¾OEJOHNBZCFBOFYBNQMFPGUIFMBDLPGFGGFDUJWFQSJDFDPNQFUJUJPOSFTVMUJOHGSPNTUSVDUVSBMDIBSBDUFSJTUJDTPGIFBMUIDBSFNBSLFUT 24 Where can $700 billion in waste be cut annually? CONCLUSIONS 0VSPCKFDUJWFXBTUPDPNCJOF5IPNTPO3FVUFSTSFTFBSDIXJUIFWJEFODFGSPNQVCMJTIFESFTFBSDIBOEFYQFSUPQJOJPOUPTVQQPSUBNFBOJOHGVMBOEDSFEJCMFFTUJNBUFGPSUIFBNPVOUPGXBTUFJOUIFIFBMUIDBSFTZTUFN8FGFFMUIBUBOFTUJNBUFPG $700 billionJTXFMMTVQQPSUFECZUIFBWBJMBCMFGBDUTBOESFTFBSDI5IF¾STUTUFQXBTUPCSFBLEPXOUPUBMXBTUFJOUPJOEFQFOEFOUDPNQPOFOUDBUFHPSJFT5IFTFDBUFHPSJFTDBOCFDMFBSMZEFTDSJCFEBOEEJGGFSFOUJBUFE\rBOESFTFBSDIBOEPUIFSFWJEFODFQSPWJEFBSFBTPOBCMFSBOHFPGSFMBUFEXBTUF5IFMFWFMPSQSFDJTJPOOFFETPOMZCFTVG¾DJFOUUPTVQQPSUUIFQVSQPTFPGUFTUJOHUIFSFBTPOBCMFOFTTPGUIFUPUBMFTUJNBUFE¾HVSF5IFSFGPSF\rSFBTPOBCMFSBOHFTDBOCFSFMBUJWFMZMBSHF8FIBWFBTTVNFEUIBUUIFDBUFHPSJFTBSFJOEFQFOEFOUBOEIBWF\rUIFSFGPSF\rTJNQMZBEEFEUIFDPNQPOFOUTUPDBMDVMBUFUIFSFBTPOBCMFSBOHFGPSUPUBMXBTUF5IJTBTTVNQUJPOJTBQQSPQSJBUFUPUIFMFWFMPGQSFDJTJPOSFRVJSFECZUIFPCKFDUJWF5IFSFTVMUJOHSFBTPOBCMFSBOHFGPSUPUBMIFBMUIDBSFTZTUFNXBTUFJT$600-$850 billion annually5IFSFGPSF\rXFDPODMVEFUIBUEFTJHOBUJOHBOFTUJNBUFECJMMJPOPSPOFUIJSEPGBOOVBMIFBMUIDBSFFYQFOEJUVSFTBTXB

25 TUFJTSFBTPOBCMFBO
TUFJTSFBTPOBCMFBOENBZCFFWFODPOTFSWBUJWF Component Ranges The six component ranges (in billions of dollars) included in the total are: "ENJOJTUSBUJWF4ZTUFN*OFG¾DJFODJFT1SPWJEFS*OFG¾DJFODZBOE&SSPST-BDLPG$BSF$PPSEJOBUJPO6OXBSSBOUFE6TF1SFWFOUBCMF$POEJUJPOTBOE"WPJEBCMF$BSF'SBVEBOE"CVTF Where can $700 billion in waste be cut annually? 258FSFDPHOJ[FUIBUUIF¾HVSFPGCJMMJPOIBTPGUFOCFFORVPUFEXJUIPVUTQFDJ¾DSFGFSFODFUPUIFUZQFTPGXBTUFJODMVEFE'PSFYBNQMF\rTPNFIBWFQSPCBCMZOPUJOUFOEFEUPJODMVEFXBTUFGSPNBENJOJTUSBUJWFTZTUFNJOFG¾DJFODJFT\rBOEPUIFSTIBWFOPUJOUFOEFEUPJODMVEFGSBVEBOEBCVTF4PNFIBWFPOMZJOUFOEFEXBTUFUPJODMVEFVOXBSSBOUFEVTF\rBWPJEBCMFDBSFBOENFEJDBMFSSPSTJOUIFJSFTUJNBUFTPGXBTUF0VSDPOTJEFSBUJPOPGUIFFWJEFODFTVHHFTUTUIBU\rSFHBSEMFTTPGUIFDPNQPOFOUTJODMVEFEJOBEF¾OJUJPOPGXBTUF\rUIFUPUBMDPTUPGXBTUFJTJOEFFEBWFSZMBSHF¾HVSF*UJTDFSUBJOMZMBSHFFOPVHIUPNFSJUBTJHOJ¾DBOUJOWFTUNFOUJOBOPOHPJOHFGGPSUUPTFBSDIGPSTQFDJ¾DXBTUF\rUPEFTJHOBOEJNQMFNFOUQSPHSBNTUPSFEVDFXBTUF\rBOEUPFWBMVBUFBOESFQPSUPOUIFTVDDFTTPGUIFTFQSPHSBNT"U\rVOXBSSBOUFEVTFSFQSFTFOUTUIFMBSHFTUTIBSFPGXBTUF\rCVUPQQPSUVOJUJFTFYJTUUPSFEVDFXBTUFJOFBDIDBUFHPSZ*UJTFWFOQPTTJCMFUIBUTPNFTUSBUFHJFTUPSFEVDFXBTUFDPVMETVDDFFEJOSFEVDUJPOTJONPSFUIBOPOFDBUFHPSZ*UJTBMTPJNQPSUBOUUPOPUFUIBU\rBMUIPVHIOPUJODMVEFEJOPVSFTUJNBUFPGBUPUBMSBOHF\rUIFXBTUFBTTPDJBUFEXJUIUSFBUJOHBMFWFMPGEJTFBTFQSFWBMFODFUIBUDPVMECFTJHOJ¾DBOUMZSFEVDFEUISPVHINPEJ¾FEJOEJWJEVBMCFIBWJPS\rJTTJHOJ¾DBOU"MUIPVHIUIFSFTQPOTJCJMJUZGPSQVSTVJOHBIFBMUIJFSMJGFTUZMFJTVMUJNBUFMZBQFSTPOBMPOF\rUIFIFBMUIDBSFTZTUFNIBTBOPQQPSUVOJUZUPFODPVSBHFCFUUFSJOEJWJEVBMDIPJDFT Unwarranted Use40%Fraud and Abuse19%Administrative System Inef®ciencies17%Lack of Care Coordination 6%Preventable Conditions and Avoidable Care 6%Provider Inef®ciency and Errors 12% 1FSDFOUBHFPG)FBMUIDBSF8BTUFCZ$BUFHPSZ5PUBMJOH#JMMJPO 26 Where can $700 billion in waste be cut annually? REFERENCES 4UBUFPGUIF

26 /BUJPOµT)FBMUI\rEBS
/BUJPOµT)FBMUI\rEBSUNFEEBSUNPVUIFEV\r4QSJOH.FEJDBM(SPVQ.BOBHFNFOU"TTPDJBUJPO\r1PTJUJPOQBQFS"ENJOJTUSBUJWF4JNQMJ¾DBUJPOGPS.FEJDBM(SPVQ1SBDUJDFT+VOF,BJTFS'BNJMZ'PVOEBUJPO\r5SFOETJO)FBMUIDBSF$PTUTBOE4QFOEJOH\r.BSDI38BHPOFS\r5FTUJNPOZCFGPSFUIF)PVTF'JOBODJBM4FSWJDFT$PNNJUUFF\r%FDFNCFS\r8BTUFBOE*OFG¾DJFODZJOUIF64)FBMUIDBSF4ZTUFN\r$MJOJDBM$BSF"$PNQSFIFOTJWF"OBMZTJTJO4VQQPSUPG4ZTUFNXJEF*NQSPWFNFOUT/FX&OHMBOE)FBMUIDBSF*OTUJUVUF\r'FCSVBSZ3FMFWBOUQSJNBSZSFGFSFODFT…#VSLF+1*OGFDUJPO$POUSPM"1SPCMFNGPS1BUJFOU4BGFUZNew England Journal of Medicine…1FOOTZMWBOJB)FBMUIDBSF$PTU$POUBJONFOU$PVODJM)PTQJUBM"DRVJSFE*OGFDUJPOTJO1FOOTZMWBOJB +VMZ\n*TTVF…(JMM+.6TFPG)PTQJUBM&NFSHFODZ%FQBSUNFOUTGPS/POVSHFOU$BSF"1FSTJTUFOU1SPCMFNXJUI/P&BTZ4PMVUJPOTAmerican Journal of Managed Care…(PO[BMFT3\r.BMPOF%$\r.BTFMMJ+)\r4BOEF."&YDFTTJWF"OUJCJPUJD6TFGPS"DVUF3FTQJSBUPSZ*OGFDUJPOTJOUIF6OJUFE4UBUFTClinical Infectious Diseases%BO[PO\r1.\r'VSVLBXB\r.'1SJDFTBOE"WBJMBCJMJUZ0G1IBSNBDFVUJDBMT&WJEFODF'SPN/JOF$PVOUSJFTHealth Affairs0DUPCFS8FC&YDMVTJWF88PPMIBOEMFS4\r$BNQCFMM5\r)JNNFMTUFJO%6$PTUTPG)FBMUIDBSF"ENJOJTUSBUJPOJOUIF6OJUFE4UBUFTBOE$BOBEBNew England Journal of Medicine\r"VHVTU\r\r/VNCFS\r7PMVNF$PMMJOT43\r/V[VN3\r3VTUHJ4%\r.JLB4\r4DIPFO$\r%BWJT,)PX)FBMUIDBSF3FGPSN$BO-PXFSUIF$PTUTPG*OTVSBODF"ENJOJTUSBUJPO5IF1SJDFPG&YDFTT*EFOUJGZJOH8BTUFJO)FBMUIDBSF4QFOEJOHIssue Brief (Commonwealth Fund)\r+VMZ5IF1SJDFPG&YDFTT*EFOUJGZJOH8BTUFJO)FBMUIDBSF4QFOEJOHXXXQXDDPNIFBMUIJOEVTUSJFT$BTBMJOP-1\r/JDIPMTPO4\r(BOT%/\r)BNNPOT5\r.PSSB%\r,BSSJTPO5\r-FWJOTPO88IBU%PFT*U$PTU1IZTJDJBO1SBDUJDFT5P*OUFSBDU8JUI)FBMUI*OTVSBODF1MBOT Health Affairs\rOP\r Where can $700 billion in waste be cut annually? 27"DDPVOUJOHGPSUIF$PTUPG6

27 4)FBMUIDBSF"/FX
4)FBMUIDBSF"/FX-PPLBU8IZ"NFSJDBOT1BZ.PSFXXXNDLJOTFZDPNNHJQVCMJDBUJPOT64@IFBMUIDBSF&YFDVUJWF@4VNNBSZBTQ,PFQLF\r%3FTFBSDI#SJFG#FODINBSLJOH0QFSBUJPOBM&G¾DJFODZBOE$MJOJDBM1FSGPSNBODF5IPNTPO3FVUFST$FOUFSGPS)FBMUIDBSF*NQSPWFNFOU4FQUFNCFS1SBU(\r-FGFWSF.\r/PXBL&\r5POOFMJFS+.\r3FOBVMU"\r-µ)FS&\r#PMFT+.*NQBDUPG$MJOJDBM(VJEFMJOFTUP*NQSPWF"QQSPQSJBUFOFTTPG-BCPSBUPSZ5FTUTBOE$IFTU3BEJPHSBQITIntensive Care Med\r \n5P&SS*T)VNBO#VJMEJOHB4BGFS)FBMUI4ZTUFN*OTUJUVUFPG.FEJDJOF\r/PWFNCFS1SFWFOUJOH.FEJDBUJPO&SSPST\r*OTUJUVUFPG.FEJDJOFReport Brief\r+VMZ'V";\r+JBOH+;\r3FFWFT+)\r'JODIBN+&\r-JV((\r1FSSJ.\rSE1PUFOUJBMMZJOBQQSPQSJBUFNFEJDBUJPOVTFBOEIFBMUIDBSFFYQFOEJUVSFTJOUIF64DPNNVOJUZEXFMMJOHFMEFSMZMed Care\r \n#FOUMFZ5(,\r&GGSPT3.\r1BMBS,\r,FFMFS&#\r8BTUFJOUIF64)FBMUIDBSF4ZTUFN"$PODFQUVBM'SBNFXPSLThe Milbank Quarterly7PM\r/P\r \n-"5JNFT1SFTT3FMFBTF\r/BUJPOBM"DBEFNJFT\r+VMZ\rJOUFSOBMTUSBUFHZEPDVNFOUT\r/PWFNCFS\r4PVUIFSMBOE+\r'JTDIFS&\r4LJOOFS+(FUUJOH1BTU%FOJBM±5IF)JHI$PTUPG)FBMUIDBSFJOUIF6OJUFE4UBUFTNew England Journal of Medicine\r4FQUFNCFS\r7PM\r/P(PPEPS6TFMFTT\r.FEJDBM4DBOT$PTUUIF4BNFNew York Times\r.BSDI\r4UVEEFSU%.\r.FMMP..\r4BHF8.\r%FT3PDIFT$.\r1FVHI+\r;BQFSU,\r#SFOOBO5"%FGFOTJWF.FEJDJOF"NPOH)JHISJTL4QFDJBMJTU1IZTJDJBOTJOB7PMBUJMF.BMQSBDUJDF&OWJSPONFOUJournal of the American Medical Association\r \n&OTVSJOH2VBMJUZ5ISPVHI"QQSPQSJBUF6TFPG%JBHOPTUJD*NBHJOH\r8BTIJOHUPO\r%$\r"NFSJDBµT)FBMUI*OTVSBODF1MBOT\r.FSFOTUFJO%\r%BVNJU(-\r1PXF/36TFBOE$PTUTPG/POSFDPNNFOEFE5FTUT%VSJOH3PVUJOF1SFWFOUJWF)FBMUI&YBNTAmerican Journal of Preventative Medicine\r \n)FBMUI3FGPSNµT5BCPP5PQJD%FGFOTJWF.FEJDJOFWashington Post+VMZ\r8FJOTUFJO

28 \r4"NFSJDBO"DBEFN
\r4"NFSJDBO"DBEFNZPG0SUIPQBFEJD4VSHFPOT ""04\n5IF$PTUPG%FGFOTJWF.FEJDJOFNow/PWFNCFS 28 Where can $700 billion in waste be cut annually?)FMMJOHFS'+\r&ODJOPTB8&5IF*NQBDUPG4UBUF-BXT-JNJUJOH.BMQSBDUJDF%BNBHF"XBSETPO)FBMUIDBSF&YQFOEJUVSFTAmerican Journal of Public Health\r"VHVTU \n&QVC+VO4VQQMZ4FOTJUJWF$BSF"%BSUNPVUI"UMBT1SPKFDU5PQJD#SJFG+BOVBSZ1SFWFOUBCMF)PTQJUBMJ[BUJPOT"8JOEPX*OUPQSJNBSZBOE1SFWFOUJWF$BSF\r"HFODZGPS)FBMUIDBSF3FTFBSDIBOE2VBMJUZ\r/P\r4FQUFNCFS,P[BL-+\r0XJOHT.'\r)BMM.+"DBEFNZGPS)FBMUI4FSWJDFT3FTFBSDIBOE)FBMUI1PMJDZ.FFUJOH/BUJPOBM5SFOETJO1PUFOUJBMMZ"WPJEBCMF)PTQJUBMJ[BUJPOT"CTUS"DBE)FBMUI4FSW3FT)FBMUI1PMJDZ.FFU/BUJPOBM)FBMUIDBSF2VBMJUZ3FQPSU\r")325BCMF)$614UBUJTUJDBM#SJFG"QSJM,SV[JLBT%5\r+JBOH)+\r3FNVT%\r#BSSFUU.-\r$PGGFZ3.\r"OESFXT31SFWFOUBCMF)PTQJUBMJ[BUJPOT"8JOEPX*OUP1SJNBSZBOE1SFWFOUJWF$BSF\r)$61'BDU#PPL/P")321VCMJDBUJPO/P3PDLWJMMF\r.%"HFODZGPS)FBMUIDBSF3FTFBSDIBOE2VBMJUZ\r"WPJEBCMF)PTQJUBMJ[BUJPOTJO1FOOTZMWBOJB*TTVF#SJFGGSPNUIF1FOOTZMWBOJB)FBMUIDBSF$PTU$POUBJONFOU$PVODJM 1)$\n/PWFNCFS$IFO-8\r;IBOH8\r4VO+\r.VFMMFS,+5IF.BHOJUVEF\r7BSJBUJPO\rBOE%FUFSNJOBOUTPG3VSBM)PTQJUBM3FTPVSDF6UJMJ[BUJPO"TTPDJBUFE8JUI)PTQJUBMJ[BUJPOT%VFUP"NCVMBUPSZ$BSF4FOTJUJWF$POEJUJPOTJournal of Public Health Management and Practice\r \n")32µT/FX1SFWFOUJPO2VBMJUZ*OEJDBUPST'MBH1PUFOUJBMMZ"WPJEBCMF)PTQJUBMJ[BUJPOT")321SFTT3FMFBTF/PWFNCFS\r'MPSFT(\r"CSFV.\r$IBJTTPO$&\r4VO%,FFQJOH$IJMESFO0VUPG)PTQJUBMT1BSFOUTµBOE1IZTJDJBOTµ1FSTQFDUJWFTPO)PX1FEJBUSJD)PTQJUBMJ[BUJPOTGPS"NCVMBUPSZ$BSF4FOTJUJWF$POEJUJPOT$BO#F"WPJEFEPediatrics/PW \n9JBP)\r#BSCFS+\r$BNQCFMM&4&DPOPNJD#VSEFOPG%FIZESBUJPO"NPOH)PTQJUBMJ[FE&MEFSMZ1BUJ

29 FOUTAmerican Journal of Health-S
FOUTAmerican Journal of Health-System Pharmacy%FD \n$VMMFS4%\r1BSDINBO.-\r1S[ZCZMTLJ.'BDUPST3FMBUFEUP1PUFOUJBMMZ1SFWFOUBCMF)PTQJUBMJ[BUJPOT"NPOHUIF&MEFSMZMedical Care+VO \n Where can $700 billion in waste be cut annually? 29"NFSJDBO%JBCFUFT"TTPDJBUJPO&DPOPNJD$PTUTPG%JBCFUFTJOUIF64JODiabetes Care.BS \n"IFSO..\r)FOESZY."WPJEBCMF)PTQJUBMJ[BUJPOTGPS%JBCFUFT$PNPSCJEJUZ3JTLTDis Manag%FD \n.PSSJT-$PNCBUJOH'SBVEJO)FBMUIDBSF"O&TTFOUJBM$PNQPOFOU0G"OZ$PTU$POUBJONFOU4USBUFHZHealth Affairs\rOPEPJIMUIBGG'SBVE.BZ"DDPVOUGPS6QUPPG)FBMUIDBSF4QFOEJOHHealthLeaders Media+VMZ\rRVPUJOHGSPNBSFQPSUGSPN5IF(FPSHF8BTIJOHUPO6OJWFSTJUZ4DIPPMPG1VCMJD)FBMUIBOE)FBMUI4FSWJDFT*HMFIBSU\r+'JOEJOH.POFZGPS)FBMUIDBSF3FGPSN±3PPUJOH0VU8BTUF\r'SBVE\rBOE"CVTFNew England Journal of Medicine+VM \n&QVC+VO+VTUJDF%FQBSUNFOU"OOPVODFT-BSHFTU)FBMUIDBSF'SBVE4FUUMFNFOUJO*UT)JTUPSZ6OJUFE4UBUFT%FQBSUNFOUPG)FBMUIBOE)VNBO4FSWJDFT1SFTT3FMFBTF4FQUFNCFS\r%BMM5.\r'VMHPOJ7-\rSE\r;IBOH:\r3FJNFST,+\r1BDLBSE15\r"TUXPPE+%1PUFOUJBM)FBMUI#FOF¾UTBOE.FEJDBM$PTU4BWJOHT'SPN$BMPSJF\r4PEJVN\rBOE4BUVSBUFE'BU3FEVDUJPOTJOUIF"NFSJDBO%JFUAmerican Journal of Health Promotion \n'JOLFMTUFJO&"\r5SPHEPO+(\r$PIFO+8\r%JFU[8"OOVBM.FEJDBM4QFOEJOH"UUSJCVUBCMFUP0CFTJUZ1BZFSBOE4FSWJDF4QFDJ¾D&TUJNBUFTHealth Affairs (Millwood) \nX"OEFSTPO-)\r.BSUJOTPO#$\r$SBJO"-\r1SPOL/1\r8IJUFCJSE33\r0µ$POOPS1+\r'JOF-+)FBMUIDBSF$IBSHFT"TTPDJBUFE8JUI1IZTJDBM*OBDUJWJUZ\r0WFSXFJHIU\rBOE0CFTJUZPreventing Chronic Disease \n"$PMEJU[("&DPOPNJD$PTUTPG0CFTJUZBOE*OBDUJWJUZMedicine & Science in Sports & Exercise 4VQQM\n48BOH(\r1SBUU.\r.BDFSB$"\r;IFOH;+\r)FBUI(1IZTJDBM"DUJWJUZ\r$BSEJPWBTDVMBS%JTFBTF\rBOE

30 .FEJDBM&YQFOEJUVSFT
.FEJDBM&YQFOEJUVSFTJO64"EVMUTAnnals of Behavioral Medicine \n$%$1SFTT3FMFBTF"QSJM\r"SNPVS#4\r'JOLFMTUFJO&"\r'JFCFMLPSO*$4UBUF-FWFM.FEJDBJE&YQFOEJUVSFT"UUSJCVUBCMFUP4NPLJOHPreventing Chronic Disease \n" 30 Where can $700 billion in waste be cut annually?3PTFO4.\r.JMMFS53\r4JNPO\r.5IF$PTUPG"MDPIPMJO$BMJGPSOJBAlcoholism Clinical and Experimental Research \n(BSSFUU/"\r#SBTVSF.\r4DINJU[,)\r4DIVMU[..\r)VCFS.31IZTJDBM*OBDUJWJUZ%JSFDU$PTUUPB)FBMUI1MBO American Journal of Preventive Medicine \n5IF$PNNPEJUJ[BUJPOPG)FBMUIDBSF&GGFDUTPG$PNQFUJUJPOPO3FJNCVSTFNFOU3BUFT\r.BOBHJOHUIF.BSHJO)FBMUIDBSF'JOBODJBM.BOBHFNFOU"TTPDJBUJPO.BZ3FJOIBSEU6&\r)VTTFZ14\r"OEFSTPO('$SPTT/BUJPOBM$PNQBSJTPOTPG)FBMUI4ZTUFNT6TJOH0&$%EBUB\r Health Affairs (Millwood).BZ+VO \n"OEFSTPO\r('\r3FJOIBSEU\r6&\r)VTTFZ\r14\r1FUSPTZBO\r7*UµT5IF1SJDFT\r4UVQJE8IZ5IF6OJUFE4UBUFT*T4P%JGGFSFOU'SPN0UIFS$PVOUSJFTHealth AffairsW\r/P4#BMV&TUJNBUFE"OOVBM%JSFDU&YQFOEJUVSFTJOUIF6OJUFE4UBUFTBTB3FTVMUPG*OBQQSPQSJBUF)ZQFSUFOTJPO5SFBUNFOU"DDPSEJOHUP/BUJPOBM5SFBUNFOU(VJEFMJOFT$MJOJDBM5IFSBQZ\r \n(SBCPXTLJ%$\r0µ.BMMFZ"+\r#BSIZEU/35IF$PTUTBOE1PUFOUJBM4BWJOHT"TTPDJBUFE8JUI/VSTJOH)PNF)PTQJUBMJ[BUJPOT)FBMUI"GGBJST .JMMXPPE\n \n%BO[PO\r1.\r'VSVLBXB\r.'1SJDFTBOE"WBJMBCJMJUZ0G1IBSNBDFVUJDBMT&WJEFODF'SPN/JOF$PVOUSJFT)FBMUI"GGBJST0DUPCFS8FC&YDMVTJWF8 ABOUT THOMSON REUTERS Thomson Reuters is the world!s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world!s most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people and operates in over 100 countries. Thomson Reuters shares are listed on the Toronto Stock Exchange (TSX: TRI) and New York Stock Exchange (NYSE: TRI). thomsonreuters.comThomson Reuters777 E. Eisenhower ParkwayAnn Arbor, MI 48108 USAPhone +1 800 366 7526 "2009 Thomson Reuters. All rights reserved. TR-7261 10/09