WASHINGTON Americans spend more than $9,000 apiece on health care every year. Ouch, you say. But how does it feel to know that more than $1,000 of that sum goes to administrative costs? Or that Americans spend more than $210 billion a year on the health insurance claims system? <\/p>\n
Needless back-office spending is one of the biggest sources of waste in health care, according to health insurers, providers and academics alike. <\/p>\n
In a recent Health Affairs article, the authors estimated that administrative expenditures account for 25.3 percent of the average American hospitals annual spending. No other developed nation comes close. The next highest, the Netherlands, spends 19.8 percent on administration. <\/p>\n
Its getting worse, said Dr. David Himmelstein, an internist who teaches at Hunter College in New York and Harvard Medical School. Himmelstein was the lead author of the article. <\/p>\n
Its because were running health care more and more like a business. What that means is, if you think you can make $101, its worth spending $100 to do it. Hospitals are saying, gee, if we hired another financial person here they might help us bring in just a little more than their salary. Theres a whole variety of games you can play. <\/p>\n
Any business with 25 percent of its spending going to administration should be trying to cut, not add, to that burden. Hospitals, physicians and insurers all say thats what theyre doing. <\/p>\n
Were continuously looking at administrative costs and looking for ways to reduce the costs, Wendell Watson, director of public relations with Texas Health Resources, wrote in an email. <\/p>\n
Over the last 10 years, weve consolidated many administrative functions to gain efficiencies and economies of scale and improved our processes to reduce costs where we can. <\/p>\n
Texas Health Resources owns 25 hospitals in North Texas. In the 12 months ending May 31, 2013, Texas Health Presbyterian Hospital of Dallas spent $119.8 million on administrative costs, or 20.3 percent of its expenditures that year. The figures come from Medicare reports sifted by American Hospital Directory, which compiles statistics on more than 6,000 hospitals. <\/p>\n
Much of the administrative expense in American health care is due to the complexity of billing. There are many insurance companies and hundreds of thousands more companies that self-insure their employees with their own nuanced health plans. A hospital or physicians office has to find the policy that matches the patient and send in a bill. <\/p>\n
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Jim Landers: Health care overhead is costing us big bucks<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" WASHINGTON Americans spend more than $9,000 apiece on health care every year. Ouch, you say. But how does it feel to know that more than $1,000 of that sum goes to administrative costs Continue reading