The cost of health insurance administration in California: estimates for insurers, physicians, and hospitals.
Administrative costs account for 25 percent of health care spending, but little is known about the portion attributable to billing and insurance-related (BIR) functions. We estimated BIR for hospital and physician care in California. Data for physician practices came from a mail survey and interviews; for hospitals, from regulatory reporting; and for private insurers, from a consulting company. Private insurers spend 9.9 percent of revenue on administration and 8 percent on BIR. Physician offices spend 27 percent and 14 percent, and hospitals, 21 percent and 7-11 percent, respectively. Overall, BIR represents 20-22 percent of privately insured spending in California acute care settings.
Kahn
James G
JG
Institute for Health Policy Studies (IHPS), University of California, San Francisco (UCSF), USA. jgkahn@ucsf.edu
Kronick
Richard
R
Kreger
Mary
M
Gans
David N
DN
D002140:California; D003625:Data Collection; D006123:Group Practice / Q000191:economics*; D006739:Hospital Administration / Q000191:economics*; D006801:Humans; D007344:Insurance Claim Reporting / Q000191:economics*; D007348:Insurance, Health