A Bipartisan Prescription for Cutting $1 Trillion in Health care Waste
Healthsperien Founding Principal and Managing Partner, Andrew MacPherson, outlines a bipartisan path to making health care more affordable by tackling the nearly $1 trillion in waste embedded in the U.S. health care system each year.
As Washington looks to the next chapter of health policy, Andrew argues that one issue could provide meaningful common ground across party lines: reducing health care costs by addressing the enormous waste in the system.
In a new op-ed, “The Bipartisan Prescription for Cutting $1 Trillion in Healthcare Waste,” he argues that while combating fraud remains essential, fraud represents only a fraction of the unnecessary spending that contributes to America’s healthcare affordability crisis.
Research from the Peter G. Peterson Foundation estimates that nearly one-quarter of U.S. health care spending, approaching $1 trillion annually, is wasteful. That includes avoidable hospitalizations, unnecessary tests and procedures, fragmented care, administrative complexity, preventable chronic disease, and prices that do not reflect the clinical value patients receive.
The larger issue facing American families is affordability.
Nearly half of U.S. adults report that health care costs are difficult to afford, and millions delay care, skip medications or struggle to pay medical bills. Health care consistently ranks among voters’ top economic concerns alongside housing, groceries and energy costs.
Addressing that broader challenge creates an opportunity for policymakers to pursue reforms that can simultaneously improve patient outcomes, strengthen federal finances, and make healthcare more affordable for families and employers.
He highlights several areas where bipartisan action could make a meaningful difference:
- Investing in prevention, wellness, and chronic disease management to improve health and reduce costly downstream care.
- Accelerating value-based care by continuing the transition from reimbursement based on volume toward models that reward quality, outcomes, and value.
- Expanding Value-Based Insurance Design (VBID) to make high-value care more accessible while reducing the use of low-value services.
- Addressing high prescription drug costs through Medicare drug price negotiations, increased biosimilar and generic competition, and reforms that prevent inappropriate delays in lower-cost alternatives.
- Reducing administrative complexity across health care, including duplicative paperwork, billing requirements, reporting mandates, and prior authorization processes.
- Responsibly leveraging AI and precision medicine, including pharmacogenomics, to reduce administrative burden, improve care coordination, support clinical decision-making, and help patients receive treatments more likely to work for them.
These policy approaches reflect a central principle that has long informed Healthsperien’s work: sustainable health care reform requires improving value, not simply shifting costs from one part of the system to another.
Many of these solutions have attracted support from both Republicans and Democrats over the past two decades. That creates an opportunity for policymakers to move beyond traditional partisan divisions and focus on practical reforms that address one of the issues Americans experience most directly: health care affordability.
“The real opportunity lies in attacking the much larger pool of waste that drives health care costs for families, employers and taxpayers. If Congress and the administration can unite around that goal, they could achieve something that has become all too uncommon in Washington: a bipartisan reform agenda that improves care, strengthens federal finances and makes health care more affordable.”
Read Andrew’s full op-ed, “The Bipartisan Prescription for Cutting $1 Trillion in Healthcare Waste,” in DC Journal.
