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posted by janrinok on Thursday January 09 2020, @12:40PM   Printer-friendly
from the pen-pushers-are-expensive dept.

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.


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  • (Score: 5, Informative) by FatPhil on Thursday January 09 2020, @05:58PM (3 children)

    by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Thursday January 09 2020, @05:58PM (#941526) Homepage
    > We citizens foot the lion's share of the cost of medical advancement for the world.

    You're figting for a podium, certainly, but once you've added together (geographical) Europe's powerhouses, the US isn't advancing things in a particularly exceptional way: https://www.quora.com/What-countries-have-lead-the-world-in-medical-research-and-innovation-during-the-time-period-between-1995-and-2014?share=1
    Sure, each of the European countries are small, but there are a lot of them.

    One'd not expect much change in this either, as the catholic US is still quite unfriendly to stem cell research. So expect most diabetes treatment advances to come from Europe and the far east. And who has the highest obesity levels, and will benefit the most from such advances? https://renewbariatrics.com/obesity-rank-by-countries/ . You're welcome.
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  • (Score: 2) by The Mighty Buzzard on Thursday January 16 2020, @04:37PM (2 children)

    by The Mighty Buzzard (18) Subscriber Badge <themightybuzzard@proton.me> on Thursday January 16 2020, @04:37PM (#944083) Homepage Journal

    Those are per-capita numbers, which are irrelevant. An island nation of a couple hundred people that comes up with one treatment would be in first place.

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    • (Score: 2) by FatPhil on Friday January 17 2020, @12:53AM (1 child)

      by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Friday January 17 2020, @12:53AM (#944337) Homepage
      Yes, you are supposed to multiply them by the countries' populations before adding them together. That's not "irrelevant" that's "too complex for the lazy", which is a different property. Maybe I could find some pre-multiplied numbers in Euros, so I can look forward to your inevitable "those numbers are in Euros, so irrelevant" response.
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