Payers and providers of health care in the U.S. spend nearly half a trillion dollars each year on billing and insurance costs, half of which is excessive, according to a new study from the Center for American Progress (CAP).
The CAP report noted that the U.S. spends 8.3 percent of total health expenditures on administrative costs annually, totaling $496 billion. This is far more than other high-income countries—more than twice as much in most cases. For example, Canada, the United Kingdom, and Australia all have annual administrative spending of 3 percent or less for health care. The study suggests that a key element of health care administration, billing and insurance-related costs (BIR), has a large role in creating a complex, wasteful health care system.
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