Healthcare administrative costs continue to surge in the U.S. making cost containment a stronger focus for healthcare leaders in 2018. In fact, here are six astounding facts on U.S. healthcare administrative costs:
- The U.S. health system has one of the highest administrative costs in the world
- This year, administrative costs are projected to more than double what they were 11 years ago, reaching $315 billion
- Around 30% of healthcare expenditures are the result of administrative costs
- Approximately 62% of administrative costs are related to billing and insurance activities
- It’s estimated that for every 10 physicians, seven employees are involved in billing activities
- 54% of surveyed physicians reported that the time spent on billing and insurance issues is a significant issue
With healthcare demands, expenses and administrative costs rising, simply cutting costs and staff cannot be the only solution. Organizations need to incorporate process improvements and tactics to increase day-to-day efficiencies. As Kevin Schulman, a Duke Professor of Medicine said, “The extraordinary costs we see are not because of administrative slack or because health care leaders don’t try to economize. The high administrative costs are functions of the system’s complexity.”
So we ask you this, what are you doing to combat administrative costs?
Sources:
