Study shows U.S. health care paperwork cost $294.3 billion in 1999

Researchers at Harvard Medical School and the Canadian Institute for Health Information, Canada’s quasi-official health statistics agency, analyzed the administrative costs of health insurers, employers’ health benefit programs, hospitals, nursing homes, home care agencies, physicians and other practitioners in the U.S. and Canada. They used data from regulatory agencies and surveys of doctors, and analyzed Census data and detailed cost reports filed by tens of thousands of health institutions in both nations. They found that health care bureaucracy cost Americans $294.3 billion in 1999. The $1,059 per capita spent on health care administration was more than three times the $307 per capita in paperwork costs under Canada’s national health insurance system. The authors found that bureaucracy accounted for at least 31 percent of total U.S. health spending in 1999 vs. 16.7 percent in Canada. Cutting U.S. health bureaucracy costs to the Canadian level would have saved $209 billion in 1999. This study was conducted with grant support from The Robert Wood Johnson Foundation. The foundation does not endorse the analyses or findings of this report or those of any other independent research projects for which it provides financial support.