More than a third of U.S. healthcare costs go to bureaucracy

by Larry Emmott on January 30, 2020

in General,Health Care Politics,Management

From  Reuters:

Over one third of all healthcare costs in the U.S. were due to insurance company overhead and provider time spent on billing,…“The average American is paying more than $2,000 a year for useless bureaucracy,” said lead author Dr. David Himmelstein,

Source: More than a third of U.S. healthcare costs go to bureaucracy – Reuters

Interesting statistics. I am not surprised. The author makes the case that health care costs could be reduced by consolidating under a single payer plan like Canada or Great Britain. I am not sure of that. Historically centralized command and control planning has resulted in shortages and lower quality.

The health care crisis is not a crisis of care but a crisis of affordability. I believe we will do much better lowering costs and increasing access using technology and free markets. Some people ague that health care is a special case where free markets will not work. Heath care is a necessity not an option. However the same could be said of food. High tech and free markets have resulted in abundant food available at lower cost than at any previous time in human history. Command and control systems inevitably end up with shortages.

Whatever, it is a clear indication of the dysfunction of our current system that one third of health care payments go to bureaucracy.

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