Health insurance paperwork wastes $375 billion

By Dan Mangan, Jan. 13, 2015

And you thought your bills were out of control.

The United States health-care system wastes an estimated $375 billion annually in billing and insurance-related paperwork that could be saved if the nation moved from a "multipayer" health coverage system to a "single-payer" system run by the government, a new study says.

That dollar figure, tied to getting people, insurance companies and governments to pay for health-care services provided, equals almost 15 percent of total national health-care spending.

"We all sort of suspected there was quite a big number, but when we came down to the actual figure it was certainly revealing," said Aliya Jiwani, health policy researcher and lead author of the report, which was published by the journal BMC Health Services Research.

Jiwani said that while "the administrative costs have been an issue" in the health-care world for years, "the fixes that have been put in place have only aggravated the issue."

In fact, the paper notes that "administrative costs as a percentage of total care health care spending more than doubled from 1980 to 2010."

The authors of the paper write that the savings from eliminating trillions of dollars in administrative waste over the years "could cover all of the uninsured" people currently in the U.S. if a single-payer system were adopted. They estimate the cost of covering all of the roughly 40 million Americans still lacking health insurance would be equal to just about half of the $375 billion in projected savings.

The balance of those savings, they write, could "upgrade coverage for the tens of millions who are under-insured."

While the paper identified a very big number of wasted dollars, it remains a big question of whether that could lead to a single-payer system anytime soon.

Full, much longer story: