Comment by linsomniac
8 hours ago
Healthcare administrative overhead in the US is pretty huge and has been for a long time. Back in the early 90s I worked on claim processing software and I recall it being discussed as being around a third of healthcare costs.
Last year this podcast said that nobody wants to solve this because solving it is going to eliminate (IIRC) hundreds of thousands of jobs. Which is a point to consider.
In 2021, the U.S. spent $1,055 per capita on healthcare administration, while the second-highest country — Germany — spent just $306 per capita, Japan is $82. https://www.pgpf.org/article/almost-25-percent-of-healthcare...
Administrative spending accounts for between 15% and 30% of total medical spending, with lower estimates covering only billing- and insurance-related expenses, and higher ones including general business overhead such as quality assurance, credentialing, and profits. https://www.healthaffairs.org/do/10.1377/hpb20220909.830296/
The Center for American Progress estimates that health care payers and providers in the United States spend about $496 billion annually on billing and insurance-related (BIR) costs alone. https://www.americanprogress.org/article/excess-administrati...
The time burden on physicians is staggering — estimated at $68,000 per physician per year spent dealing with billing-related administrative matters. https://www.pgpf.org/article/almost-25-percent-of-healthcare...
> The time burden on physicians is staggering — estimated at $68,000 per physician per year spent dealing with billing-related administrative matters
Having had my share in the administrative part of the medical field, that figure is most probably somewhat misleading. Every time you deal with billing you are bound to deal with granularity. On one extreme you could bill per case, on the other extreme you can count the paperclips used. It could seem at the first glance that the more you move towards the latter, the more time has to be spent by someone to somehow eventually form the invoice.
However, this surface-level conclusion misses the fact that patient care does not start and stop at the the operating room door. Some processes mandate transparency/traceability and thus documenting what's being done and used is part of the process anyway. [edit: the final deliverables are not a treated patient, but rather a treated patient and documentation complete with medicine authorizations / prescriptions (including for drugs used internally), sick-leave certificates, etc.]. That data is then effectively reused for billing, with minimal overhead hopefully. Yes, there's a lot of room for improvement and automatization, but activities not directly related to active care make up a sizable portion of the time.
Isn't this true across other sectors as well? NYC DOE spends $42,000 per child on education ~half of that is administration costs.
https://apps.schools.nyc/dsbpo/sbag/default.aspx?DDBSSS_INPU...
>Last year this podcast said that nobody wants to solve this because solving it is going to eliminate (IIRC) hundreds of thousands of jobs.
That's the reason why a lot of inefficiencies are kept in countries around the world: it keeps people employed and moves money through the economy. If broken things were suddenly to be made efficient overnight, the government wouldn't be able deal with masses of angry people/voters suddenly out of a job.
This reminds of a debate in the German parliament 30 years back or so, about the cost for the Eurofighter project (IIRC). Essentially one speaker had argued against the staggering cost, and a second speaker from the government defended the project by saying how many jobs it created. Someone shouted that building a pyramid in honor of Helmut Kohl and it would create a lot of jobs as well, that didn't mean it's a good idea.
The sentiment reminds me of the people who believe that having so much prosperity that people feel comfortable not working all year around... represents some terrible threat that must be vigorously resisted for the greater good! Think of what it would do to the poor metrics.
Literal overnight change might be too radical (although, frankly, I'd want to see some academic work on the matter because it sounds like it might work - typically the problem seems to be that the body politic tries every alternative but good policy first then blames the mess on freedom) but people who are scared of rapid improvement because they don't like change are a massive threat to human prosperity and really shouldn't be left in charge of anything important.
Delaying the industrial revolution was never a good choice at any point in human history. The potential gains from efficiency are unbelievably large.
>not working all year around
Keeping people employed through inefficient bullshit jobs is better for the government than paying them to sit at home, since this way you have control over their livelihoods and their votes.
This is a sign of a broken system. It's the old joke about paying someone to smash windows and someone to repair them, how that's great for The GDP.
And they say there's no socialism in the US
I witnessed this devolution with my GF. She's a medical provider in CA that, since the mid-90's, got her funding from a state agency. She met with the agency once per quarter, reviewed her funding claims, worked out any discrepancies one-on-one, in-person with her representative. Worked great. Then private insurance muscled their way in. It's been a bureaucratic nightmare ever since. She had to hire a full-time staffer just to handle all the insurance BS. She never needed that before private insurance.
The nightmare isn't just for her; it's also for her patients. She now spends almost as much time walking her patients through the insurance bureaucracy than she spends on actual treatment. And it's so sad because her patients are so desperate (parents of extremely sick children), but often get nothing but bureaucratic run-around from their private insurers.
So yeah, it's been a lose-lose situation since private insurance took over.