A new OECD report released Jan. 10 reveals a shocking truth: About 20 cents of every dollar spent on health care in OECD countries is wasted in some fashion. That waste represents more than 20 percent of total health expenditure in the United States.

The findings of the report, entitled “Tackling Wasteful Spending on Health,” will be discussed at a meeting for OECD Ministers of Health in Paris on Jan. 16–17.

According to the report’s author, Agnès Couffinhal, a senior OECD health economist, it is alarming that around one-fifth of health expenditure makes no or minimal contribution to good health outcomes, especially at a time when public budgets are under pressure worldwide.

As she explains, “Governments could spend 20 percent less on health care and still improve patients’ health.” With as much as 9 percent of GDP spent on health-care systems across the OECD — 6.75 percent of which is by federal governments — this savings could mean a lot.

Surprising findings in the OECD report reveal:

  • A third of OECD citizens consider the health sector to be corrupt or even extremely corrupt.
  • 1 in 10 patients in OECD countries is unnecessarily harmed at the point of care.
  • More than 10 percent of hospital expenditures is spent on correcting preventable medical mistakes, or infections that people catch in hospitals.
  • 1 in 3 babies are delivered by Caesarean section, despite medical indications suggesting that C-section rates should be 15 percent at most.
  • The market penetration of generic pharmaceuticals — drugs with effects equivalent to those of branded products but typically sold at lower prices — ranges between 10 percent and 80 percent across OECD countries. (This is not a problem in the United States, where the generics market is very dynamic and the price of a generic drug is on average 8 percent to 80 percent lower than that of brand-name drugs.)

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