3 ms·
Only 10% of the increase in medical cost in the US is attributable to doctor salaries. The remainder is administrative overhead, Rx costs, insurance administra
by bdunks 3y ago
Only 10% of the increase in medical cost in the US is attributable to doctor salaries. The remainder is administrative overhead, Rx costs, insurance administration, etc.
There are now 10 administrators for every 1 doctor.
Since 1970, the number of physicians has increased by 2x. The number of administrative staff has increased by 38x.
If each administrator is making 100k+ - 150k+, that's significant cost.
Some of these crazy billing practices are due to the private equity buy-ups and consolidation, creating workflows and fee structures that are hostile to patients and doctors, but benefit the PE firms.
https://www.commonwealthfund.org/publications/issue-briefs/2023/oct/high-us-health-care-spending-where-is-it-all-going https://www.commonwealthfund.org/publications/issue-briefs/2...
Lots more data here:
https://www.healthsystemtracker.org/ https://www.healthsystemtracker.org/
- Eric_WVGG 3y agoThat kind of lazy thinking drives me up the wall. There's a huge swatch of America that thinks elementary school teachers are bringing home FAT BUCKS because college tuition costs are high. It's the corporations, stupid.
- bdunks 3y agoAbsolutely. I used the number of administrative personal * administrative salaries because it's a quick mental visualization. I just reviewed United Healthcare's 2022 10k. In 2022, they had $324B in revenue, and paid $210B in medical expenses. Of the $114B remaining, $85.5B was various operating costs, $28.5B (25%) was corporate profit / operating income (before interest & taxes). Even if all 40,000 employees of UnitedHealth Group were making 200k (they're not), that'd only account for $8B of their $85.5B in non-medical costs. https://www.unitedhealthgroup.com/content/dam/UHG/PDF/invest https://www.unitedhealthgroup.com/content/dam/UHG/PDF/invest...
- refurb 3y agoUS administration costs account for 14% of "excess costs" (above OECD average). https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Healthcare%20Systems%20and%20Services/Health%20International/HI08_American_health.ashx https://www.mckinsey.com/~/media/mckinsey/dotcom/client_serv... I worked in healthcare and this McKinsey report (exhibit 2 on page 81) is probably the best analysis I've seen that tries to isolate where the extra money is going. The biggest driver of higher US healthcare costs is outpatient care. And it's not just that each healthcare event is more expensive (though it is), it's that Americans get a lot more outpatient care than other OECD countries.