title: A comparison of hospital administrative costs in eight nations: US costs exceed all others by far.
abstract: A few studies have noted the outsize administrative costs of US hospitals, but no research has compared these costs across multiple nations with various types of health care systems. We assembled a team of international health policy experts to conduct just such a challenging analysis of hospital administrative costs across eight nations: Canada, England, Scotland, Wales, France, Germany, the Netherlands, and the United States. We found that administrative costs accounted for 25.3 percent of total US hospital expenditures--a percentage that is increasing. Next highest were the Netherlands (19.8 percent) and England (15.5 percent), both of which are transitioning to market-oriented payment systems. Scotland and Canada, whose single-payer systems pay hospitals global operating budgets, with separate grants for capital, had the lowest administrative costs. Costs were intermediate in France and Germany (which bill per patient but pay separately for capital projects) and in Wales. Reducing US per capita spending for hospital administration to Scottish or Canadian levels would have saved more than $150 billion in 2011. This study suggests that the reduction of US administrative costs would best be accomplished through the use of a simpler and less market-oriented payment scheme.
authors.affiliation: David U. Himmelstein (dhimmels@hunter.cuny.edu) is an internist; a professor at the School of Public Health and Hunter College, City University of New York (CUNY), in New York City; and a lecturer at Harvard Medical School.
authors.forename: David U
authors.initials: DU
authors.lastname: Himmelstein
authors.affiliation: Miraya Jun was a research officer at the London School of Economics and Political Science (LSE), in the United Kingdom, at the time of this study. She is now an independent consultant to the LSE.
authors.forename: Miraya
authors.initials: M
authors.lastname: Jun
authors.affiliation: Reinhard Busse is a professor of health care management at the Technische Universität Berlin-World Health Organization Collaborating Centre for Health Systems Research and Management, in Berlin, Germany.
authors.forename: Reinhard
authors.initials: R
authors.lastname: Busse
authors.affiliation: Karine Chevreul is the deputy director of the Paris Health Services and Health Economics Research Unit at the Assistance Publique-Hôpitaux de Paris (the Paris area's University Medical Center) and deputy director of ECEVE (UMR 1123), a research team of the French National Institute of Medical Research, in Paris, France.
authors.forename: Karine
authors.initials: K
authors.lastname: Chevreul
authors.affiliation: Alexander Geissler is a senior research fellow in health care management at the Technische Universität Berlin, in Germany.
authors.forename: Alexander
authors.initials: A
authors.lastname: Geissler
authors.affiliation: Patrick Jeurissen is head of the Celsus Academy on Sustainable Healthcare, Nijmegen Medical Centre, Radboud University, in Nijmegen, the Netherlands.
authors.forename: Patrick
authors.initials: P
authors.lastname: Jeurissen
authors.affiliation: Sarah Thomson is an associate professor in the Department of Social Policy, London School of Economics, and a senior research associate at the European Observatory on Health Systems and Policies, in London, England.
authors.forename: Sarah
authors.initials: S
authors.lastname: Thomson
authors.affiliation: Marie-Amelie Vinet is a health economist at the Paris Health Services and Health Economics Research Unit at the Assistance Publique-Hôpitaux de Paris and also a member of the ECEVE team (UMR 1123) of the French National Institute of Medical Research.
authors.forename: Marie-Amelie
authors.initials: MA
authors.lastname: Vinet
authors.affiliation: Steffie Woolhandler is an internist; a professor at the School of Public Health and Hunter College, CUNY; and a lecturer at Harvard Medical School.
authors.forename: Steffie
authors.initials: S
authors.lastname: Woolhandler
mesh_terms: D002170:Canada; D003365:Costs and Cost Analysis; D004739:England; D005602:France; D005858:Germany; D006739:Hospital Administration / Q000191:economics*; D006801:Humans; D009426:Netherlands; D016134:Organizational Policy; D012606:Scotland; D014481:United States; D014852:Wales
keywords: Cost of Health Care; Developed World < International/global health studies; Financing Health Care; Health Economics; Hospitals