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> so this article's conclusions about the role of admin costs are... not particularly thorough You seem to be in aggressive agreement with it, though. From you

by bhupy 5y ago

> so this article's conclusions about the role of admin costs are... not particularly thorough You seem to be in aggressive agreement with it, though. From your own calculation here, the per capita savings amounts to about ~10%, which isn't a whole lot given that peer nations pay ~50% less all-things-considered (and nowhere close to the 1/3 figure from the original reply). And that's if you were to zero out admin costs, which even among peer nations is impossible to do — it's a real part of COGS no matter what The thesis and conclusion remains: Solving the admin cost problem hardly makes a dent (and don’t get me wrong, it’s certainly worth solving!). The lion's share of the variance in healthcare costs between the US and peer nations is in the price of healthcare, not administrative costs. There are a lot of reasons for this, and it's a whole debate in and of itself.

handrous 5y ago
Several things have excess costs amounting to 5-10% of the total. The whole reason it's so hard to fix this problem is that there isn't one source of excess or unnecessary expenses. Insurance? "Well, sure, but that's only 5-10% of the cost". Other admin? "Well sure, but that's only 5-10% of the cost". Too-high doctor salaries? "Well sure..." and so on. Taking the per-capita admin costs from ~$1600 to a closer-to-normal ~$600 is a major win. It is not negligible. Further, all the data have shown so far is that admin costs aren't under 15% of the total. More categories of admin costs (any from health care providers that aren't hospitals, notably) still lurk somewhere in that inpatient/outpatient care block.
- bhupy 5y ago
  Actually, the single highest leverage cost reduction measure is to reduce the raw cost of care, which is 5x higher than peer nations. Once you do that, the 5-10% here and there no longer matters. If you spend much time in this industry, you’re bound to hear the phrase “bending the cost curve”, because that’s where the primary focus is right now.

by bhupy 5y ago

handrous 5y ago

Several things have excess costs amounting to 5-10% of the total. The whole reason it's so hard to fix this problem is that there isn't one source of excess or unnecessary expenses. Insurance? "Well, sure, but that's only 5-10% of the cost". Other admin? "Well sure, but that's only 5-10% of the cost". Too-high doctor salaries? "Well sure..." and so on. Taking the per-capita admin costs from ~$1600 to a closer-to-normal ~$600 is a major win. It is not negligible. Further, all the data have shown so far is that admin costs aren't under 15% of the total. More categories of admin costs (any from health care providers that aren't hospitals, notably) still lurk somewhere in that inpatient/outpatient care block.

bhupy 5y ago
Actually, the single highest leverage cost reduction measure is to reduce the raw cost of care, which is 5x higher than peer nations. Once you do that, the 5-10% here and there no longer matters. If you spend much time in this industry, you’re bound to hear the phrase “bending the cost curve”, because that’s where the primary focus is right now.