On November 6, 2019

Why does health care cost so much?

Dear Editor,

Why are American health care costs so high?  Experts offer up an extensive menu of explanations, which other experts dispute.  The answer is a lot simpler than they make it.  To paraphrase James Carville, “It’s the administrative costs, stupid.”

In 2011, the Commonwealth Fund reported that U.S. medical offices spent 20.6 hours a week on billing issues for every physician in the office. Given that 827,261 active doctors of medicine were providing patient care in the U.S. in 2015, that’s 170,415,766 total hours each week.  In Ontario, billing took up only 2.5 hours a week per doctor.  Had we been able to reduce our 20.6 hours to Ontario’s 2.5 hours, we would have spent 149,734,241 fewer hours on billing.  If you assume that the average hourly wage of the medical office person handling the billing issues is $15, a conservative assumption, that’s a savings of $2,246,013,615.

And that, of course, is for one week.  One week.  Think about that.  Over a 50-week year, that’s $112,300,680,750—more than $345 for every one of the 325 million people in America.  And that’s just doctor billing waste.  Add in hospital billing, insurance company billing, time spent by employers’ benefit departments and by pharmacies.

Just last month the medical journal JAMA published a study estimating that the “administrative complexity” of American health care was wasting $265.6 billion a year.

A single payer system is the best way to reduce those costs.  Maybe that’s why the experts don’t like to talk about it.

Lee Russ,

Bennington

Do you want to submit feedback to the editor?

Send Us An Email!

Related Posts

If Vt wants a future of abundance, we must choose to build

April 23, 2025
By Miro Weinberger Editor’s note: Weinberger is currently the executive chair of Let’s Build Homes. He was raised in Hartland and served as mayor of Burlington from 2012-2024. If you’ve turned on a podcast, watched a late-night show, or scrolled social media in the past month, you’ve probably heard something about “Abundance,” the new book…

Vermont School Board Asso. supports H.454 ed plan

April 23, 2025
Dear Editor, VSBA supports the bill as a more thoughtful and phased approach than Governor Scott’s rushed, five district proposal. Grounded in a more realistic timeline: H.454 is the most grounded and actionable proposal developed during the 2025 session. It acknowledges the operational realities education leaders face every day. The implementation timeline is more manageable…

Vote Bill Vines for Killington Select Board

April 23, 2025
Dear Editor, At the special election on May 28, I am running for the 2-year seat on the Killington Select Board. An incredibly diverse group of people call Killington home; my partner Mary Furlong and I included. After years of renting a ski house, we purchased our first Killington home in 1995. In 1997 we…

The real enemy isn’t fear, it’s how we let it divide us

April 23, 2025
By Stanley McChrystal Editor’s Note: Stanley McChrystal, who is retired from the Army, is the former commander of U.S. and International Security Assistance Forces in Afghanistan and the former commander of Joint Special Operations Command. He is the author of the forthcoming book “On Character: Choices That Define a Life.” This commentary was first published…