Administrative Costs Of Healthcare Comprise 30% Of Total Costs Of Healthcare

 In Healthcare   Last Updated: July 29, 2017

Administrative costs for healthcare “constituted some 30 percent of U.S. health-care costs and that the share of the health-care labor force comprising administrative (as opposed to care delivery) workers had grown 50 percent to constitute more than one of every four health-sector employees.”

Compared to other countries, administrative costs for healthcare are very high.  Data from the Organization for Economic Co-operation and Development (OECD) shows the U.S. having the highest percentage of total healthcare spending from administrative costs:

Admin costs in U.S. health care are the highest in the developed world. They account for over 8% of spending in the sector.  Globally, health care systems spend about 3% on average on administration.  ‘Private insurance generates a relatively high share of total administrative expenditure,’ the report’s authors explained, noting that admin costs are generally lower when governments manage health care coverage.

 

 

 

Pfeffer, Jeffrey. “The Reason Health Care Is So Expensive: Insurance Companies.”Bloomberg.com. Bloomberg, 10 Apr. 2013. Web. 14 Mar. 2017.
Health Expenditure and Financing.” Health Status. OECD.stat, n.d. Web. 14 Mar. 2017.

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