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