U.S. Hospitals' Administrative Costs 'Exceed All Others': New Health Affairs Study

eAlert 5a948c43-2501-4677-ac22-a3990a21993f

Administrative costs, including per-patient billing, account for a quarter of all spending by U.S hospitals, according to a new <a href="/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us">Commonwealth Fund–supported study</a> in <em>Health Affairs </em>that compares these costs across eight nations. The United States had the highest administrative costs per person, while Scotland and Canada had the lowest. Reducing these costs to Scottish or Canadian levels would have saved the U.S. more than $150 billion in 2011.<br /><br />
The researchers, led by David U. Himmelstein, M.D., note that in the U.S., where there are multiple payers, billing is more complex, since each hospital must negotiate payment rates separately with each payer while conforming with a variety of requirements and procedures.<br />
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Also in the new issue of <em>Health Affairs</em>:<br />
<li>Julia Adler-Milstein and colleagues compare how the U.S. and three other high-income nations—Australia, Canada, Denmark—are using <a href="/publications/journal-article/2014/sep/comparison-how-four-countries-use-health-it-support-care">health information and communications technologies</a> to manage care for chronically ill patients, and report on the common challenges the countries face. The authors say greater cross-national learning could help providers in each country leverage new technologies to improve care coordination and engage patients in managing their own conditions.</li>
<li>The virtues of the <a href="/publications/journal-article/2014/sep/chronic-care-model-strategies-united-states-and-germany">Chronic Care Mode</a>l, which emphasizes provider teamwork, strong communication and goal-setting, and the participation of patients in their own care, are demonstrated in a study of two diabetes management programs, one run by Geisinger Health System in Pennsylvania and the other by Barmer, a sickness fund in Germany that provides medical insurance nationwide. According to patient experience survey data, enrollees in both programs received higher-quality care compared to patients getting routine diabetes treatment.</li>
<li>In their evaluation of three new <a href="/publications/journal-article/2014/sep/integrated-care-experiences-and-outcomes-germany-netherlands">integrated care delivery networks</a> in Germany, the Netherlands, and England, Reinhard Busse and Juliane Stahl find the top performer to be Germany’s Gesundes Kinzigtal, which uses a regional population-based approach. The system has saved more than $200 per patient per year and achieved decreased mortality, higher patient satisfaction, and higher cooperation among care providers. The German network model “deserves to be more closely studied by researchers and policymakers in the United States,” the authors conclude.</li>
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http://www.commonwealthfund.org/publications/newsletters/ealerts/2014/sep/us-hospitals-administrative-costs-exceed-all-others Read the article summaries.