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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: 2) by dry on Friday January 10 2020, @06:07AM (2 children)

    by dry (223) on Friday January 10 2020, @06:07AM (#941785) Journal

    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.

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  • (Score: 2) by srobert on Friday January 10 2020, @07:10AM (1 child)

    by srobert (4803) on Friday January 10 2020, @07:10AM (#941799)

    "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

      by dry (223) on Friday January 10 2020, @07:54PM (#942007) Journal

      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.