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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: 3, Interesting) by JoeMerchant on Thursday January 09 2020, @05:08PM
Cuba has healthcare from the 1950s which matches their overall industry/lifestyle which is also mostly stuck in the 1950s - thus they have 1950s health outcomes, which are pretty good as compared with today. The rich also have the "bail out" option for exotic diseases which are treatable in the US/Europe, which improves overall outcomes.
The US has "the most advanced society on Earth" - including advances in number of hours spent commuting, exposure to funky industrial chemicals, the 5 simultaneous screens always connected lifestyle, a thoroughly industrialized food supply chain with heavy controls implemented by companies like RJReynolds, Altria, and Philip Morris who diversified into foods after tobacco got a black eye, etc. and, so, we have a modern healthcare system to deal with these modern challenges.
I toured former East Germany in 1990, got some bumps and scrapes while there but nothing my immune system couldn't handle. I returned to Dusseldorf and after a couple of days I contracted blood poisoning from a shower handle in a youth hostel (though an open abrasion in my hand...) but, in addition to high population density and diseases, Dusseldorf also had hospitals everywhere and after a 5 minute walk I was patched up. If that had happened in the East, I might have lost the arm, or died, but... it didn't happen in the East, it happened where it was much more likely to happen and that's where the hospitals were built up to deal with such things.
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