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: 3, Insightful) by All Your Lawn Are Belong To Us on Thursday January 09 2020, @02:36PM (4 children)
... It would be given as profit to the insurance companies "administering" the Medicare-For-All program. The Government has already sold out the administration of healthcare to private entities, believing that they can do it cheaper and better than government can.
This sig for rent.
(Score: 5, Interesting) by ikanreed on Thursday January 09 2020, @03:16PM (1 child)
You know you can look at the current actual medicare budget [hhs.gov] and see that, no, administration costs are a mere 9.5 billion of the 720 billion TCO. You could argue that the 15 billion from "related expense benefits" should be thrown in, because that represents non-care spending as well. Even counting account tricks as part of the administration cost, you can see that administration is only 2.5% of the money spent on care.
Medicare has the advantage of being one of the few federal programs not yet victimized* by "public private partnerships" or "privatization" or whatever euphemism you want to use for overpriced middlemen absorbing all the money and doing minimal work.
*Except medicare part D, which thankfully is still pretty small.
(Score: 3, Informative) by All Your Lawn Are Belong To Us on Thursday January 09 2020, @05:47PM
Look into Medicare Advantage.
This sig for rent.
(Score: 3, Insightful) by JoeMerchant on Thursday January 09 2020, @03:27PM (1 child)
Healthcare, particularly when it encompasses critical care - trauma - life and death, is not something that "works" in classical capitalist competition.
"The Government" is schizofrenic, at best. One half seems consumed with making the other half look bad, so whatever they control they use to sabotage anything connected to the "other side."
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Thursday January 09 2020, @05:35PM
Maybe with better health care we can increade mental health coverage and start reducing the culturally induced sociopathy.