Billing And Insurance–Related Administrative Costs: A Cross-National Analysis

Abstract

Billing and insurance-related costs are a significant source of wasteful health care spending in Organization for Economic Cooperation and Development nations, but these administrative burdens vary across national systems. We executed a microlevel accounting of these costs in different national settings at six provider locations in five nations (Australia, Canada, Germany, the Netherlands, and Singapore) that supplements our prior study measuring the costs in the US. We found that billing and insurance-related costs for inpatient bills range from a low of $6 in Canada to a high of $215 in the US for an inpatient surgical bill (purchasing power parity adjusted). We created a taxonomy of billing and insurance-related activities (eligibility, coding, submission, and rework) that was applied to data from the six sites and allows crossnational comparisons. Higher costs in the US and Australia are attributed to high coding costs. Much of the savings achieved in some nations is attributable to assigning tasks to people in lower-skill job categories, although most of the savings are due to more efficient billing and insurance-related processes. Some nations also reduce these costs by offering financial counseling to patients before treatment. Our microlevel approach can identify specific cost drivers and reveal national billing features that reduce coding costs. It illustrates a valuable pathway for future research in understanding and mitigating administrative costs in health care.

Administration’s Share of Personnel in Veterans Health Administration and Private Sector Care

“…Many studies have documented US health care’s high administrative costs, with several studies pointing to complex billing processes as drivers of those costs . Several analyses have compared US administrative costs or staffing with those in other nations, but to our knowledge, none have examined Veterans Health Administration (VHA) facilities.…”

The Volume and Cost of Quality Metric Reporting

“…To inform such policymaking, we identified quality and safety metrics reported annually at the Johns Hopkins Hospital, a large academic medical center in Maryland. We then used time-driven activity-based costing to estimate annual personnel time and financial cost to the hospital of quality metric reporting (excluding time spent designing or implementing quality improvement interventions). The Johns Hopkins Hospital reports metrics generally relevant throughout the US as well as Maryland-specific metrics.…”

“…10 To inform such policymaking, we identified quality and safety metrics reported annually at the Johns Hopkins Hospital, a large academic medical center in Maryland. We then used time-driven activity-based costing 11,12 to estimate annual IMPORTANCE US hospitals report data on many health care quality metrics to government and independent health care rating organizations, but the annual cost to acute care hospitals of measuring and reporting quality metric data, independent of resources spent on quality interventions, is not well known.…”

AI Alone Will Not Reduce the Administrative Burden of Health Care

“…Transaction costs in the US are 10 times those in the Netherlands, which has a private multipayer health care system. 7 LLMs are clearly an exciting technology, but the current market environment is far from optimized to enable this technology to provide a solution for practicing physicians. In fact, adding LLMs to this milieu might LLMs are clearly an exciting technology, but the current market environment is far from optimized to enable this technology to provide a solution for practicing physicians.…”

“…This is not a question of how health care is financed, but a question of transaction processes underlying the market. Transaction costs in the US are 10 times those in the Netherlands, which has a private multipayer health care system …”