Study finds billions of health insurance dollars used for administrative costs

Public release date: 10-Nov-2005

Contact: Stephanie Levin
slevin@pubaff.ucsf.edu
415-885-7277
University of California - San Francisco

Billing and insurance paperwork consume at least one out of every five dollars of private insurance health spending in California, according to a new study by health policy researchers.

The findings suggest that about $230 billion in health care spending nationally is devoted to insurance administration.

"Over the last decade, administrative costs have accounted for 25 percent of health care spending. Little has been known, however, about the portion attributable to billing and insurance-related functions," said James G. Kahn, MD, MPH, principal study investigator and professor at the Institute for Health Policy Studies at the University of California, San Francisco.