According to the Institute of Medicine, almost one third of health care spending in 2009 went to cover useless garbage: unnecessary services, administrative costs, and fraud. All in all, that amount totaled some $750 billion per year. “The threats to Americans’ health and economic security are clear and compelling,” said Mark D. Smith, president and CEO of the California HealthCare Foundation, “and it’s time to get all hands on deck.” The same study argued that up to 75,000 deaths could have been stopped in 2005 if all states had been up to par.
The Institute specifically suggested that health care institutions do a better job of keeping track of information, and create new payment models. If this much money is lost under a semi-privatized health care sector – semi-privatized, since it’s one of the most heavily regulated sectors in America – how much administrative cost and fraud will ensue once Obamacare kicks in?