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The convergence of healthcare quality and efficiency

July 8th, 2009

Milliman clinicians Helen Blumen and Lynn Nemiccolo have published a new healthcare reform research report about the relationship between improving healthcare quality and finding new efficiency in the delivery of care.

 

Q: How much waste is present in today’s healthcare system?

A: Milliman’s actuaries have concluded that the amount of waste in the U.S. healthcare system is in excess of 25% of total healthcare spending, or more than $600 billion in 2008 dollars. These estimates square with the numbers put forward by other prominent sources.

Q: How does Milliman define waste?

A: Milliman has defined inefficiency or waste within the healthcare delivery system as unnecessary, redundant, or ineffective treatment (and the costs associated with such treatment). This includes treatment that is contrary to, or not demonstrably associated with, healthcare quality and outcomes. Looking beyond the care delivery system, inefficiency also includes costs that are not demonstrably associated with a sound approach to enabling full access for everyone to appropriate healthcare coverage.

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