*More Than A Third Of U.S. Healthcare Costs Go To Bureaucracy* NEW STUDY
Last edited Tue Jan 7, 2020, 03:44 PM - Edit history (1)
"More Than A Third Of U.S. Healthcare Costs Go To Bureaucracy," Linda Carroll, Reuters, Jan. 6, 2020. EXCERPTS:
(Reuters Health) - 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 Canadas 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..
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.
- Why are administrative costs so high in the U.S.? Its because the insurance companies and health care providers are engaged in a tug of war, each trying in its own way to game the system, Himmelstein said. How a patients treatment is coded can make a huge difference in the amount insurance companies pay. For example, Hammerstein said, if a patient comes in because of heart failure and the visit is coded as an acute exacerbation of the condition, the payment is significantly higher than if the visit is simply coded as heart failure.
This upcoding of patient visits has led insurance companies to require more and more paperwork backing up each diagnosis, Himmelstein said. The result is more hours that healthcare providers need to put in to deal with billing.
(One study) looked at how many characters were included in an average physicians note in the U.S. and in other countries, Himmelstein pointed out. Notes from U.S. physicians were four times longer to meet the bureaucratic requirements of the payment system.
The new study is the first analysis of administrative costs in the U.S. and Canada in almost 20 years, said Dr. Albert Wu, an internist and professor of health policy and management at the Johns Hopkins School of Public Health in Baltimore. Its an important paper.
Its clear that health costs in the U.S. have soared, Wu said. Were paying for an inefficient and wasteful fee-for-services system....
More, https://www.reuters.com/article/us-health-costs-administration/more-than-a-third-of-us-healthcare-costs-go-to-bureaucracy-idUSKBN1Z5261
ritapria
(1,812 posts)We need Medicare for All NOW . Everyone covered...30,000 lives saved annually.. No more Medical bankruptcies.. healthcare spending per capita cut in half ..You see the doctor you want ...You are no longer stuck in a job you despise because they provide your family good health insurance .. Savings from healthcare greater than increase in taxes for most folks The rest of the Western World have figured this out long ago .It is radically stupid to continue our present system .
appalachiablue
(41,184 posts)OldBaldy1701E
(5,184 posts)offers options that do not involve the concept of insurance, and therefore don't have to deal with that corruption and price gouging. They don't have to deal with a two-tiered pricing system. These days, I do feel there is one thing the US leads the planet in when it comes to society, and that is examples of what not to do.
Turbineguy
(37,383 posts)I'm astonished it's so low.
JudyM
(29,294 posts)both our financial expense, our psychological expense and our doctors expense. This is a structural nightmare that negatively impacts our health in various ways.
OldBaldy1701E
(5,184 posts)we refuse to consider anything other than alternative versions of insurance. What about federal hospitals? What about public options that don't jack prices to extreme levels, don't create a multi-tier pricing plan, and will just offer some help without having to pay 3000 people who have nothing to do with my healthcare. And please, do not start with the 'Six Degrees of Kevin Bacon' routine. You can connect anything to anything, but is it really having an effect on your healthcare, or is it that they TELL you it is?
Aristus
(66,481 posts)But I guess the corporate world does things more efficiently, huh?
underpants
(182,964 posts)and all the people below them.
mwooldri
(10,303 posts)That and bloated health insurance executive salaries... Chief Exec of NHS England makes about $350k a year. I believe one Blue Cross Blue Shield executive makes at least ten times that - and that's just one health insurance company.