Study: Bureaucracy Eats Up One-Third of Healthcare Costs

It's no secret that the price of healthcare continues to rise, but a new study finds more than a third of those costs in the U.S. are spent on bureaucracy---things like government agencies, insurance companies, billers, administrators, etc. "That's not surprising at all," says David Balat, director of the Right on Healthcare Initiative for the Texas Public Policy Foundation. "So much of the money that is dedicated for healthcare is not going to those that are providing or receiving the care, it's going to middlemen who are extracting a lot of the value out of the system."

Balat tells KTRH he believes there are simply too many people involved in healthcare besides the doctor and patient. "For all the people that actually touch a patient, the number of people who are service providers that never touch a patient and are not involved in the system at all, eclipses the number of actual providers," he says.

The authors of the study advocate a nationalized "Medicare-for-All" system like Canada's as a solution to reducing unnecessary costs. But Balat warns that such a system would only add more bureaucracy and costs, while weakening care. "In Canada there is a great deal of rationing, and by the time some people get access (to healthcare), they are much worse off or not even able to get that care anymore," he says. "Medicare-for-All would severely reduce the number of physicians that we have in this country."

Instead of a nationalized healthcare system, Balat would like to see Congress get out of the way and allow states to try more innovative patient-centered solutions like direct care, which doesn't involve insurance. "In order to make (healthcare) more affordable, more efficient, and more accessible, I think it's important that we extract and mitigate the need for so many people to be involved in the supply chain, or in the delivery of care," he says.

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