The phenomenon of health care “administrative sludge” also factors into national statistics on health care inefficiency.
According to a study from the Center for American Progress, payers, and providers of health care in the U.S. spend nearly half a trillion dollars each year on billing and insurance costs.
This phenomenon has led many companies to explore new benefit delivery options, such as BHS’s partnership with MetroCare, which reduces administrative overlap through direct billing management.
In total, the U.S. spends 8.3 percent of its health expenditures on administrative costs - $496 billion – which is more than twice as much as other western Countries such as Canada, the UK and Australia.
The Journal of American Medical Association reported that up to 25% of health care spending in the U.S. is “wasteful.” Of the $760 billion per year cited in that study, $265.6 billion was attributed to administration.