A lot of money goes into the American healthcare system, from both the government and individuals. But according to one study conducted by CNN.com, as much as $1.2 trillion of that is spent on wasteful and unnecessary processes. This slideshow discusses the top 8 money wasters as identified in the study, which account for a whopping $667 billion in wasted healthcare funds.


8. Hospital-Acquired Infections

According to one study, as much as $3 billion is wasted every year on treating infections and illnesses that are acquired during hospital stays. Obviously, people know that hospitals are a hotbed for germs, but there are certain measures that should be followed to prevent the spread of these illnesses. Make hand sanitizer readily available throughout the hospital, and ensure that staff members are following proper protocol for handwashing, disposing of contagion-carrying materials, and so on.


7. Unnecessary ER Visits

Any time a patient comes into the ER, the doctors and nurses are legally obligated to see to that patient’s needs, regardless of what their complaints may be. However, many of those people filling the seats of the ER waiting room don’t need to be there, and they account for $14 billion of wasted funds. Make sure your patients are aware that there are other treatment options available out there, such as urgent care facilities. This can help cut down on those wasted costs.


6. Medical Errors

Even medical professionals are human beings, so mistakes are bound to happen. But those little mistakes add up to an astounding $17 billion in healthcare costs. What can be done about this? Steps have already been taken, including a stimulus bill pushing for electronic health records, computerized prescription orders, and other processes that would move away from more manual, error-prone systems. Even President Obama has repeatedly said that the use of technology in the medical sector would “help boost savings, enhance the coordination of care and reduce medical errors and unnecessary procedures.” So if you’re still doing these sorts of things manually, it’s time to get with the program and switch to electronic systems.


5. Hospital Readmissions

Sometimes, a patient’s readmission to the hospital can’t be prevented. However, many readmissions can, and one estimate puts the cost of preventable readmissions as high as $25 billion a year. According to the study, this is a frequent problem for elderly patients who are discharged prematurely due to issues with insurance or bed availability. Improper prescriptions and dosages could also be a big contributor to these preventable readmissions. As already mentioned, electronic health records and computerized orders could help to minimize such problems and reduce these costs.


4. Ineffective Use of Technology

As much as $88 billion is wasted in the healthcare industry every year simply due to the ineffective use of available technology. This can include medical technologies as well as office and document management technologies that would minimize manual processes, prevent human error, and save time for countless healthcare professionals. Though there is always a cost for implementing technology in a medical facility, the overall cost savings in the long run would greatly outweigh any upfront costs for implementation and training.


3. Ignoring Doctor’s Orders

Though this applies primarily to patients, it can also be applicable to nurses and other medical professionals working alongside the physician. Failing to follow doctor’s orders costs an estimated $100 billion in wasted healthcare funds every year. This includes the cost of readmission caused by both patient’s failure to follow orders as well as improper treatment given by hospital staff. Of course, there’s little you can do to make your patients follow instructions once they’re home, but you can ensure that communication and protocol are both clear to all of your hospital staff.


2. Processing Claims

Though listed as second in this list of biggest money wasters, processing claims and paperwork can actually waste just as much money in the healthcare industry as the top waster—up to $210 billion annually. Physicians and medical care facilities of all kinds waste a lot of time and money simply processing insurance claims. Insurance companies all have their own forms, and some practices are estimated to spend as much as 40% of their revenue filling out this paperwork. Not only does this take time away from your patients, but it adds to your administrative fees and interrupts the cash flow into your business. So much of this process could be automated with document management software. Fill out the form on this page to learn more about eliminating this time waster from your facility.


1. Over Testing

Many medical issues that come through your doors will require some kind of testing—bloodwork, body scans, and so on. However, many doctors in the medical field are ordering too many tests, either to increase their revenue or to try to prevent liability issues. These unnecessary tests cost the healthcare system an estimated $210 billion every year. Reformers are calling for more “evidence-based” guidelines that would limit the number of superfluous tests performed and reduce these wasted costs.