How Administrative Costs Drive Healthcare Costs

Administration of medical care is a huge driver of costs in the United States' healthcare system. Running hospitals, generating bills, and collecting payment are just a few of the activities that take up health providers' time, and run up the costs of care.

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John Green -- Executive Producer
Stan Muller -- Director, Producer
Aaron Carroll -- Writer
Mark Olsen – Graphics
Meredith Danko – Social Media

And the housekeeping:

[kmashbaker]

I am a nurse who worked at the bedside for 15 years, then moved into a role where I worked more on the billing side. I couldn’t believe how much time and money is spent on the unseen part of medicine, all of the administrative costs. It changed my perspective on the benefits of a single payor system. We could save so much money off things were straight forward, instead of so convoluted.

[nraynaud]

yeah, I'm French and I went to the dentist in the US, that was crazy. 3 people behind the desk, then a parade in the room: hygienists, patient care coordinators (I think it's the salesperson, they do the quote), some dentists, all come with their assistant. I spent 2 hours at the dentist, saw a dozen of people, left without *any* care done (just exams) and a $1500 quote.

[amanatee]

Despite the frustrating topic, I really appreciate these videos! Thank you!

[SaucerJess]

For 24 days in the ICU, for just the bed, not the meds, not the surgery, not even the 24 hour nurse care, the hospital billed me $996, 860. Aetna's member rate on this same bill was $28, 523. WTF. 💙

[zduarte]

Can you do a show on physician salary/benefits as a % of total healthcare expenditure? I haven't seemed to peg down a good number.

[bonez]

Glad this was addressed on your channel. Been waiting for it!

[dietetistepedipwa]

You are very well spoken and respectful! Thank you! You are refreshing! Good day

[qb]

This is why I went to the surgery center of Oklahoma. No insurance, period. So much better.

[guslaskaris]

I think this video underestimates the impact of the administrative burden on health care. I'm an ER doctor. I am not exaggerating when I say that 70 percent of my time is spent sitting in front of a computer documenting various aspects of the patient encounter. This is true even with the new, supposedly more efficient, electronic medical records systems (EMRs) like EPIC and Cerner. In fact, we now document more because we can. The hospital doesn't want to miss a single dime of potential revenue so now everybody including doctors and nurses spend most of their time on typing or dictating into EMRs which are mostly billing systems. Even a simple visit...a sore throat...generates a 12-page chart and endless boilerplate, much of it robotic. The actual useful content of most charts for most patients could be summarized in one succinct paragraph.

What this means is that there is no real doctor or nursing shortage. If paperwork disappeared today you would see a sudden at least doubling of capacity. This is how much of our time is dissipated. People who are not in health care don't realize this...or you do when you notice your doctor seems to spend your entire visit typing on her laptop.

Modern American health care is the most ridiculous enterprise in the history of the world. It will take a large, planet-killing meteor to fix it.

[alarcon]

Are administrative costs also responsible for the huge cost of childbirth? I know the money isn't going to the care of mothers in the U.S.

[Schru]

And also take into consideration that the large portion of administrative costs is actually including health insurance administration. While this is part of US Healthcare, I would argue that they have developed into two separate industries. If you were to cut hospital and clinic administrative staff, good luck staying financially solvent / complying with best practices / implementing a QI department / improving patient experience. Physicians, nurses, and other careteam staffing are already overwhelmed with the intense acuity of their jobs.

[lightbox]

Thank you for your piece in today's NYT re: the Metadata study on the dangers of alcohol. As usual, your comments brought clarity and some intellectual perspective to the argument.

[peanut]

Hospitals are Westin Hotel prices with Motel 6 service, at least you get your monies worth at the fancy hotels.

[Thunderwalker]

So if there was a single-payer-like NHS and/or Medicare-for-all plan... the cost of American health care would unavoidably and eventually go down because administrative costs would be streamlined and consolidated? Then WHY do all the cost analysis of Senator Sanders' Medicare-for-all bills tend to assume CURRENT costs and CURRENT cost projections?

[kathyfausett]

Since the insurance industry highjacked healthcare, hospital CEO's have been devising strategies to stay afloat. The energy in hospitals has gone from the patient to revenue opportunities. It would be really interesting if one could calculate how much energy and money are devoted to patient care vs making money. Allowing a third party to call the shots is a really bad idea, and I'm not optimistic that healthcare professionals can retake the hill.

[jacoblee]

No other business gets to operate like healthcare.  I had about a 20 hour period of my life cost me $20, 000.  An hour and half of that was spent driving myself between hospitals and about 17 hours where spent in a recovery room sleeping by myself.  That's $1000 an absolutely outrages!  I had my appendix removed, the actual surgery itself took less then 20 mins and went smoothly.

[lalorespicio]

Most admin personnel get paid more than techs nurses and personnel who provide direct patient care. Health care is not a good field to get into now a days

[Kyrator]

The "I happened to look at my subs when it was uploaded" club

[carolechisum]

We’ve got too many people getting their Masters Degrees in Healthcare Administration or even more generic MBAs.

[NCKSO]

So not having free healthcare makes you pare more taxes? God Bless America indeed