High costs and unsafe care are major challenges for U.S. hospitals. Two sources of raised costs and unsafe care are adverse events in hospitals and tests ordered by several different physicians. After reviewing rates of these two occurrences in U.S. hospitals and simulating their costs, the authors estimated that in 2004 alone, eliminating readily preventable adverse events would have resulted in direct savings of more than $16.6 billion (5.5%% of total inpatient costs). Eliminating redundant tests would have saved an additional $8 billion (2.7%). Addressing these situations could generate major savings to the system while improving patient care.