Reply #83: Verification [View All]

[Mairead]

The Harvard studies by Himmelstein and Woolhandler, and Himmelstein, Woolhandler, and Wolfe found that

Bureaucracy in the health care system accounts for about a third of total U.S. health care spending – a sum so great that if the United states were to have a national health insurance program, the administrative savings alone would be enough to provide health care coverage for all the uninsured in this country, according to two new studies. {emphasis added}

The first study, which is to be published Thursday in The New England Journal of Medicine, finds that health care bureaucracy cost U.S. residents $294.3 billion in 1999. The $1,059 per capita spent on health care administration was more than three times the $307 per capita in paperwork costs under Canada’s national health insurance system. Cutting U.S. health bureaucracy costs to the Canadian level would have saved $209 billion in 1999, researchers found.

The study, the most comprehensive analysis to date of health administration spending, was conducted by researchers at Harvard Medical School and the Canadian Institute for Health Information, Canada’s quasi-official health statistics agency. The authors analyzed the administrative costs of health insurers, employers’ health benefit programs, hospitals, nursing homes, home care agencies, physicians and other practitioners in the United States and Canada. They used data from regulatory agencies and surveys of doctors, and analyzed Census data and detailed cost reports filed by tens of thousands of health institutions in both nations.

The authors found that bureaucracy accounted for at least 31 percent of total U.S. health spending in 1999 compared to 16.7 percent in Canada. They also found that administration has grown far faster in the United States than in Canada. Between 1969 and 1999, administrative and clerical personnel in the United States grew from 18.2 percent to 27.3 percent of the health work force. In Canada, those personnel grew from 16 percent in 1971 to 19.1 percent in 1996.

http://www.pnhp.org/news/2003/august/administrative_costs.php