At the Intersection of Health, Health Care and Policy Cite this article as: Samuel Metz High Administrative Costs At US Hospitals Health Affairs, 33, no.11 (2014):2081 doi: 10.1377/hlthaff.2014.1096

The online version of this article, along with updated information and services, is available at: http://content.healthaffairs.org/content/33/11/2081.1.full.html

For Reprints, Links & Permissions: http://healthaffairs.org/1340_reprints.php E-mail Alerts : http://content.healthaffairs.org/subscriptions/etoc.dtl To Subscribe: http://content.healthaffairs.org/subscriptions/online.shtml

Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600, Bethesda, MD 20814-6133. Copyright © 2014 by Project HOPE - The People-to-People Health Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or mechanical, including photocopying or by information storage or retrieval systems, without prior written permission from the Publisher. All rights reserved.

Not for commercial use or unauthorized distribution Downloaded from content.healthaffairs.org by Health Affairs on May 27, 2015 by guest

Letters There is a limit of 300 words for letters to the editor. Health Affairs reserves the right to edit all letters for clarity, length, and tone. Letters can be submitted by e-mail, [email protected], or the Health Affairs website, http:// www.healthaffairs.org.

doi:

10.1377/hlthaff.2014.1096

High Administrative Costs At US Hospitals David Himmelstein and coauthors (Sep 2014) show that administrative costs in US hospitals exceed those in hospitals in seven other developed nations and indicate that this extra spending buys more administrators, not more benefits. This raises the question of why American hospitals need more administrators than foreign hospitals do. The authors say that the extra administrators in the United States determine patients’ insurance benefits and their ability to pay costs that are not covered by insurance. These functions are unnecessary elsewhere. Unlike nations with national insurance plans, the United States spends billions of dollars to fragment our population into thousands of insurance pools and then to fragment those pools into tens of thousands of subsets with differing benefits. This format generates substantial administrative challenges. For example, physician offices in Chicago might deal with 17,000 different payment

schedules. 1 It costs more money to exclude patients and restrict benefits that it would to provide comprehensive care to all patients without fragmentation. Two authors of the September article previously estimated that replacing our multipayer system with a national health program would recover $320 billion in administrative costs. 2 This exceeds the estimated $220 billion in additional costs needed to provide comprehensive care to everyone. 3 The message is clear: Barriers to health care cost more than universal access to health care. Samuel Metz PORTLAND , OREGON NOTES 1 Kagel R. Blue crossroads: insurance in the 21st century. Amednews.com [serial on the Internet]. 2004 Sep 20 [cited 2014 Sep 15]. Available from: http://www.amednews.com/article/20040920/ business/309209993/4 2 Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med. 2003;349(8): 768–75. 3 Sheils J, Haught RA. The Health Care for All Californians Act: cost and economic impacts analysis [Internet]. Falls Church (VA): Lewin Group; 2005 Jan 19 [cited 2014 Sep 15]. Available from: http://www.lewin.com/~/media/Lewin/ Site_Sections/Publications/3015.pdf

N ov e m b e r 2 0 1 4

33 : 1 1

Downloaded from content.healthaffairs.org by Health Affairs on May 27, 2015 by guest

Health A ffairs

2081

High administrative costs at US hospitals.

High administrative costs at US hospitals. - PDF Download Free
51KB Sizes 2 Downloads 8 Views