The Multi-Billion Dollar Drain — And How Care Coordination Can Help
The U.S. healthcare system is known for cutting-edge innovation and advanced technology. Yet, it also faces a critical problem: clinical waste — unnecessary spending that adds no value and often causes harm. This issue drains hundreds of billions of dollars each year, affects access to care, burdens clinicians, and reduces trust.
Reducing waste isn’t just about cutting costs — it’s about improving safety, outcomes, and the sustainability of the system. One powerful solution? Effective care coordination.
"The pathway to a sustainable, high-quality healthcare system is paved with the reduction of non-value-added activities and expenditures."
What Is Clinical Waste?
Clinical waste isn’t just unused supplies — it’s spending that could be avoided without hurting care quality, and often while improving it.
Failure of Care Delivery
Poor execution of care (e.g., hospital-acquired infections, avoidable readmissions)
Failure of Care Coordination
Fragmented transitions between providers or settings
Overtreatment / Low-Value Care
Unnecessary services not backed by evidence (e.g., repeat MRIs for stable conditions)
Administrative Complexity
Excess overhead in billing, coding, prior authorizations, and payer management
Pricing Failures
Excessive prices not aligned with value (e.g., $50 aspirin, inflated lab costs)
The Scale: How Much Is Wasted?
According to the 2019 JAMA study by Shrank et al.:
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Waste accounts for ~25% of total U.S. health care spending
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That’s $760 billion to $935 billion annually
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Only a portion (~$191B to $282B) is realistically recoverable with current interventions
Estimated Annual Cost by Category
Source: Shrank et al., JAMA, 2019
Real-World Waste: Common Scenarios
🚨 Failure of Care Coordination
A discharged pneumonia patient doesn’t receive timely follow-up → incorrect meds → ED visit → readmission.
“Information fell through the cracks.”
💰 Overtreatment
- Repeated MRIs for stable back pain, despite guidelines.
- Driven by patient anxiety and provider defensiveness.
📞 Administrative Complexity
Nurse spends hours on prior authorization calls.
“We spend more time tending the system than the patient.”
🩹 Care Delivery Failure
A patient develops a pressure ulcer due to poor inpatient protocols.
💵 Pricing Failure
A hospital bills $50 for a single aspirin or $3,000 for a basic lab panel.
⚠️ Fraud & Abuse
A clinic bills for services never provided or uses exaggerated codes for reimbursement.
Why It Matters?
❌ Patient Harm – from unnecessary or poorly delivered care
⛔ Access Barriers – wasted resources could be spent on prevention or underserved populations
💼 Clinician Burnout – especially among nurse coordinators navigating administrative
💔 Eroded Trust – patients lose faith when bills are unclear and outcomes suffer
🚫 Missed Opportunities – less money for research, equity, or addressing social determinants of health
The Role of Care Coordination in Reducing Waste
Care coordination — especially when supported by AI-powered platforms — can directly reduce waste in key areas:
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Fixing Care Coordination Failures
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Smooth transitions between providers
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Timely follow-ups and medication reconciliation
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Fewer readmissions, fewer avoidable ED visits
02
Avoiding Overtreatment
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Shared records across providers = no redundant tests
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Nurse coordinators guide shared decision-making aligned with patient values
03
Improving Care Delivery
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Coordinated medication and symptom monitoring
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Early intervention via alerts or remote data
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Reduced hospital complications
04
Simplifying Internal Admin
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Streamlined scheduling, referrals, and documentation
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AI can automate follow-ups, flag gaps, and reduce nurse workload
🌍 Global Perspective
While some waste (like administrative overload) is uniquely American, coordination failures are global. Around the world, poor communication between care settings leads to harm and inefficiency.
Global strategies include:
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Team-based care models
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Strengthening primary care’s coordinating role
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Digital tools for shared patient data