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Study: More than a third of healthcare costs go to bureaucracy:
U.S. insurers and providers spent more than $800 billion in 2017 on administration, or nearly $2,500 per person – more than four times the per-capita administrative costs in Canada’s single-payer system, a new study finds.
Over one third of all healthcare costs in the U.S. were due to insurance company overhead and provider time spent on billing, versus about 17% spent on administration in Canada, researchers reported in Annals of Internal Medicine.
Cutting U.S. administrative costs to the $550 per capita (in 2017 U.S. dollars) level in Canada could save more than $600 billion, the researchers say.
“The average American is paying more than $2,000 a year for useless bureaucracy,” said lead author Dr. David Himmelstein, a distinguished professor of public health at the City University of New York at Hunter College in New York City and a lecturer at Harvard Medical School in Boston.
“That money could be spent for care if we had a ‘Medicare for all program’,” Himmelstein said.
To calculate the difference in administrative costs between the U.S. and Canadian systems, Himmelstein and colleagues examined Medicare filings made by hospitals and nursing homes. For physicians, the researchers used information from surveys and census data on employment and wages to estimate costs. The Canadian data came from the Canadian Institute for Health Information and an insurance trade association.
When the researchers broke down the 2017 per-capita health administration costs in both countries, they found that insurer overhead accounted for $844 in the U.S. versus $146 in Canada; hospital administration was $933 versus $196; nursing home, home care and hospice administration was $255 versus $123; and physicians’ insurance-related costs were $465 versus $87
They also found there had been a 3.2% increase in U.S. administrative costs since 1999, most of which was ascribed to the expansion of Medicare and Medicaid managed-care plans. Overhead of private Medicare Advantage plans, which now cover about a third of Medicare enrollees, is six-fold higher than traditional Medicare (12.3% versus 2%), they report. That 2% is comparable to the overhead in the Canadian system.
(Score: 0, Interesting) by Anonymous Coward on Thursday January 09 2020, @01:27PM (8 children)
Not only is it a Soviet style bureaucracy, we have multiple redundant copies of the Soviet style bureaucracy. Single payer might not be the best system, but anything is better than what we have.
(Score: 1, Troll) by ewk on Thursday January 09 2020, @02:27PM (6 children)
Anything? Please, hold my beer and let me introduce you to the NHS...
I don't always react, but when I do, I do it on SoylentNews
(Score: 3, Insightful) by JoeMerchant on Thursday January 09 2020, @05:13PM (3 children)
Sucky as the NHS may be, it's easily better for the majority of the population than what the US has, at roughly half the cost.
My current insurance has a "base rate" and then "optional coverage" for things like knee replacement and other high cost semi-elective operations. I think it may be a sort of teaser trial for a form of single-payer in the US - you get your basic coverage with the national plan, but if you want Lasik, or a new hip, or an experimental procedure: pony up at the register and you're in.
🌻🌻 [google.com]
(Score: 2) by dry on Friday January 10 2020, @06:07AM (2 children)
Knee and hip replacements are free in Canada, though there's usually a long wait, Lasik isn't covered but the prices seem pretty reasonable, at least from their ads, doing an eye seems to be about the cost of a good pair of glasses.
(Score: 2) by srobert on Friday January 10 2020, @07:10AM (1 child)
"Knee and hip replacements are free in Canada, though there's usually a long wait".
In the U.S., the wait times aren't as long, unless you're poor, in which case, you should probably kill yourself.
(Score: 2) by dry on Friday January 10 2020, @07:54PM
One of the tenants of our healthcare system is everyone is treated the same, at least in theory. In practice, besides any prejudices (conscious or unconscious) that Doctors might have, coverage can depend on where you live, with fast growing communities probably the worse here and the rich can always leave the country to get their hip or knee replacement.
There's lots of triaging so if you need heart surgery like my sister recently, it's quick, she had to wait a day as she showed up at the hospital on Sunday whereas more elective stuff is done when nothing more pressing is happening.
(Score: 0) by Anonymous Coward on Thursday January 09 2020, @10:17PM (1 child)
This NHS? [dailymail.co.uk]
(Score: 2) by ewk on Friday January 10 2020, @08:17AM
Yeah... that seems about the right one.
I don't always react, but when I do, I do it on SoylentNews
(Score: 0) by Anonymous Coward on Thursday January 09 2020, @10:09PM
Well, I have first hand experience with Soviet healthcare.
It is different, but there is nothing in it what you could call better.
It is fking terrible.