It's going to the administration overhead. If you have to document everything and argue for every medical procedure and deal with 20+ different processes for filing claims then it takes time. And, as a provider, you have to pay someone to spend that time if you want to get paid.

It doesn't help that our healthcare billing systems are so outdated and broken. I once had a doctor visit denied with the reason code that it should charge the other insurance (for people on multiple plans). I was only on one plan, but my wife was on two. The doctor and I went through all the paperwork - my name was right, my birthday was right, my policy number was right and when I got notice of the rejection it had my name on it. Eventually we traced it to an error - not in my insurance company, not in the company that handles claims in this areas for my insurance, but instead in some middle-man company that was responsible for transferring claims between the two. Nevermind that all three companies claimed to be BlueCross BlueShield. This took over a year to resolve.

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tptacek an hour ago | parent [-]

No it's not. There is absolutely no way to get from $360B of insurer admin and net cost of insurance to $2.5T --- two point five trillion --- in practitioner costs on paperwork overhead. That is not a plausible argument.

The numbers here are not close. They're stark.

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ceejayoz 42 minutes ago | parent [-]

https://news.cornell.edu/stories/2011/08/us-health-care-cost...

> A new study finds that the extra time and labor physician practices spend on interacting with insurance companies and government entities cost U.S. physicians $82,975 each per year, while doctors in Ontario spent $22,205.

> Canadian physicians follow a single set of rules, but U.S. doctors grapple with different sets of regulations, procedures, requirements, formularies and forms mandated by each health insurance plan or payer. The average U.S. doctor spent 3.4 hours per week interacting with health plans; Ontario doctors spent 2.2 hours. The bureaucratic burden falls heavily on U.S. nurses and medical practice staff, who spent 20.6 hours per physician per week on administrative duties; their Canadian counterparts spent only 2.5 hours on paperwork.

All that falls in your $2.5T bucket. And their cleaners, HR, etc. And insurers have had 15 years of innovation since that study.

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tptacek 24 minutes ago | parent [-]

You haven't done the math here. Multiply the numbers out. This is what I'm talking about. How are you supposed to engage with these topics if you're literally recoiling from 7th grade arithmetic? Congratulations, taken on your own terms, you just found 3.6% worth of savings from practitioner costs.

My local grocery store wouldn't even bother issuing a coupon for that small a discount.

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ceejayoz 18 minutes ago | parent [-]

This is one example of an aspect where insurance causes costs that are not directly attributable to the insurer in your numbers.

This isn’t seventh grade math. This is kindergarten level cause and effect.

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tptacek 11 minutes ago | parent [-]

Yes, as I said, if we accept your claim at face value, that every dollar of American practitioner-side insurance overhead --- not the delta from Canada, but every single dollar of it --- is mis-spent, you managed to identify 3.6% of the waste in the system. Congratulations.

I said earlier we'd gone round-and-round on this topic before, and I was a little burned out on it, but I didn't expect you to refute your own argument like this. I'm glad we gave it another run this time! This is a great statistic; I'll be using it elsewhere. Thank you.

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ceejayoz 8 minutes ago | parent [-]

Insurance has more than one way to run the costs up; this is but one of them. Weird rebate deals with drug manufacturers. Vertical integration. Buying practices and paying them higher rates.

> I was a little burned out on it

I just did my taxes and am a little burned out by the $49k in healthcare expenses I got to deduct on them.

	▲	tptacek 7 minutes ago \| parent [-]
		I look forward to the next 3% you find and put on the table!