34% of Health Care Spending Used for Administrative Costs, Study Finds
About 34% of private health care spending in California goes toward administrative costs, according to a study published Thursday in the journal Health Affairs, the San Francisco Chronicle reports.
In the study, researchers led by James Kahn of the Institute of Health Policy Studies at the University of California-San Francisco analyzed data collected from 73 insurers between 1996 and 2001, survey responses from physicians and hospital administrative costs reported to the state.
The study found:
- 21% of private health spending, or about $26 billion, was spent on insurance paperwork annually;
- 13% of private health spending was used to pay for other administrative tasks, such as maintaining medical records;
- Private insurers spend about 8% of premiums on billing; and
- Billing paperwork accounted for about 14% of spending in physician offices and 7% to 11% in hospitals (Colliver, San Francisco Chronicle, 11/11).
The study is available online. This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.