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Administrative costs are killing U.S. healthcare

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by Ryan Gamlin
Medical Economics
May 21, 2016

 
The United States faces an unenviable paradox: the healthcare sector is an important source of job growth and economic output, but healthcare costs—now comprising nearly one fifth of economic output—are dramatically higher than those in other developed nations, and continue to rise.

Ryan GamlinWarren Buffet summed up this dilemma vividly, saying that healthcare is the “… tapeworm of the American economy… I think the healthcare problem is the No. 1 problem of America and of American business.”

Adding proverbial insult to injury, the United States—for all it spends on healthcare—gets far less for its money.

The Commonwealth Fund’s report on international health system efficiency ranks the United States last of 11 developed nations on measures such as quality of care, access to care, efficiency of care, and equity of care. The work of the Commonwealth Fund contributes to a body of evidence suggesting that what we’re doing to provide, administer, and finance healthcare is just not working.

The Lown Institute is one of a number of organizations working to understand the drivers of inefficiency, waste, and harm in U.S. healthcare, and I recently had the opportunity to attend their annual conference. While there, I presented my research exploring the relationship between a country’s administrative expenditures and health system efficiency.

Read the full article here.

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