The insurance industry says that PNHP’s figures on administrative costs are outdated. Is this true?
PNHP has published a series of peer-reviewed studies over the past 20 years showing a steady increase in health administrative costs. While some aspects of administrative cost estimation (e.g. physicians’ billing costs) require special studies, others, such as insurance overhead, can be easily tracked from publicly available data. These figures show no evidence of a fall in administrative costs since our most recent (2003) comprehensive estimate that administration consumes at least 31% of U.S. health care spending. Recently, right-wing “think tanks” have released studies claiming that Medicare’s administrative costs are far higher than the official 3% estimate. These estimates add to Medicare’s costs a share of the salaries of the President and members of Congress, the cost of running the Internal Revenue Service, etc. But none of these added costs would go away if Medicare were abolished, or up if Medicare were expanded to cover everyone. Most economists agree that such expenses shou
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- The insurance industry says that PNHP’s figures on administrative costs are outdated. Is this true?
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