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How much is too much? What does the US actually spend on health care administration?

Executive Director - Friday, April 06, 2018

The United States spends much more on health care each year than wealthy equals around the globe. That’s not just true for spending on direct patient care, but also for spending on health care administration. Many scholars recognize the cost containment potential in curbing administrative costs. Determining just how much the US spends on health care administration and in what ways are critical first steps.
How much of US health care spending is on administration?
Health care administration includes all activities related to coordinating health and medical services, such as scheduling, billing, and claims processing. Administrative costs’ contribution to overall health care spending is large and growing.
System-level estimates for health care administrative costs are limited and often dated. One highly cited estimate suggests that administrative costs accounted for about 30% of total health care expenditures in 1999. In 2006-2007, administrative costs outpaced growth in other health care categories, such as professional services, and matched growth rates in typically costly categories, such as prescription drug spending.
Though we may not be able to pin down a current estimate of total administrative costs, we do know it’s substantial and continues to increase. Other research focuses on administrative costs in three, large subcategories: billing and insurance-related (BIR) costs, hospital administration, and physician practice administration. 2018-04-05 Healthcare Dive [issue:14760]&utm_term=Healthcare Dive

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