America spends a lot of money on the paperwork that makes hospitals run— $218 billion per year, to be exact. That works out to 1.43 percent of the entire American economy is spent on hospitals’ administrative costs. Of every $100 spent in America, that means $1.43 is going toward the billing specialists and schedulers that make hospitals here work.
Hospital administration has grown as a percent of the economy over the past decade, from 0.9 percent in 2000 to 1.43 percent in 2012, a new paper in the journal Health Affairs shows.
To put this in a bit of context: America spends twice as much on hospital administration as it does on the entire food budget
Reminded me of this classic Yes Minister episode
The following exchange between the minster and Mrs Rogers, the hospital administrator, from about 12 seconds in
Minister “Isn’t it deplorable that its not being used?”
Mrs Rogers “Oh no, a very good thing in some ways, prolongs its life, cuts down running costs”
M “But there are no patients!”
Mrs R “No, but the essential work of the hospital still has to go on”
M “Aren’t patients the essential work of the hospital?”
Mrs R “Running an organisation of 500 people is a big job minister”….
In 2012, the total cost of health spending in the US was $2.8 trillion or 17.2 percent of the total US economy. In the same year, health economists from the John Hopkins University published a paper in The Journal Of Pain that estimated the total cost of chronic pain in the US as $635 billion – per year. Swamping heart disease ($309 billion), cancer ($243 billion) and diabetes ($188 billion). The figures from Australia, Canada and Britain are not far off in relative size.
Based on these numbers, a very quick and dirty calculation suggests that the cost of just administrating healthcare for chronic pain each year in the US is about $50 billion.
None of these numbers are getting smaller.
The well worn words that Einstein probably never said could not be more appropriate; “The significant problems we face today cannot be solved at the same level of thinking we were at when we created them”