Billions Spent On Health Care Paperwork

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(San Francisco, CA)
Monday, November 14, 2005

About one of every five dollars spent on private health care in California goes to billing and insurance paperwork, according to a report released by the Institute of Health Policy Studies at the University of California San Francisco.

That translates into about 26 billion dollars a year.

Doctor James D. Kahn, the author of the study, says the 20 percent figure is only a portion of the administrative overhead.

"An additional 13 cents is for other types of administration, like medical records and that leaves sixty-six cents for to pay for medical care."

The study concluded that the largest billing and insurance-related categories for private insurers are claims, finance, marketing, and information systems, each accounting for as much as one and a half percent of premiums.

The findings are published in the most recent issue of Health Affairs.