WASHINGTON • The U.S. health care system squanders $750 billion a year — roughly 30 cents of every medical dollar — through unneeded care, byzantine paperwork, fraud and other waste, the influential Institute of Medicine said Thursday in a report that ties directly into the presidential campaign.

President Barack Obama and Republican Mitt Romney are accusing each other of trying to slash Medicare and put older people at risk. But the counterintuitive finding from the report is that deep cuts are possible without rationing.

"Health care in America presents a fundamental paradox," said the report from an 18-member panel of prominent experts, including doctors, businesspeople and public officials. "The past 50 years have seen an explosion in biomedical knowledge, dramatic innovation in therapies and surgical procedures, and management of conditions that previously were fatal. ...

"Yet, American health care is falling short on basic dimensions of quality, outcomes, costs and equity."

How much is $750 billion? The one-year estimate of health care waste is equal to more than 10 years of Medicare cuts in Obama's health care law. It's more than the Pentagon budget. It's more than enough to care for the uninsured.

Getting health care costs better controlled is one of the keys to reducing the deficit, the biggest domestic challenge facing the next president.