[t0mpr1c3]

The administrative overhead is not trivial: probably about 25%.

Worse is the distortion of incentives for healthcare providers. The giant leaky insurance tit is there to be sucked on, creating corruption at every level.

When you are billed for a procedure you have no idea how much you are going to get charged or what you could get billed for. There could be gigantic opaque charges for things you have never heard of. Ticketmaster could only dream of such a rip-off.

Not to mention blatant over-billing for unnecessary diagnostics, etc. Every year new kickback schemes are discovered.

[tptacek]

25% of what, and where are you getting that number? JAMA studied this on an encounter-by-encounter basis and found BIR costs were in the tens of dollars for normal visits to low (100-300) for inpatient surgery.

Price transparency is a real problem. Overbilling is a real problem, so is overprescription. Important to keep in mind that those are on the provider side, not the payer.

[t0mpr1c3]

25% is perhaps on the high side of estimates, but perfectly plausible. If you prefer citations from JAMA: https://jamanetwork.com/journals/jama/fullarticle/2785479

[tptacek]

That's all administrative costs. As the abstract says, many of those costs are intrinsic to providing services.

Here's JAMA for the BIR, based directly on cost breakdowns in specific real systems:

https://jamanetwork.com/journals/jama/fullarticle/2673148

[t0mpr1c3]

Quoting from the paper you just cited:

"Administrative costs have been estimated to represent 25% to 31% of total health care expenditures in the United States, a proportion twice that found in Canada and significantly greater than in all other Organization for Economic Co-operation and Development member nations for which such costs have been studied."

[tptacek]

So before we even get into the proportion of admin costs from BIR, you have to cut your number in half. I don't think admin costs are going to end up the real story in US health care. It's overpaying practitioners and overprescribing procedures. There are more MRI machines in Massachusetts than in all of Canada.