Billing And Insurance-Related Administrative Costs: A Cross-National Analysis

Area of Science:

• Health economics
• Healthcare administration
• Comparative health systems

Background:

• Billing and insurance-related (non-clinical) costs represent a substantial portion of wasteful health care spending in developed nations.
• Significant variations exist in these administrative burdens across different national healthcare systems.
• Previous research quantified these costs in the US, necessitating international comparisons.

Purpose of the Study:

• To conduct a microlevel accounting of billing and insurance-related costs across multiple provider sites in five Organization for Economic Cooperation and Development (OECD) nations.
• To compare these costs internationally and identify specific cost drivers and national features contributing to variations.
• To inform strategies for mitigating administrative costs in healthcare.

Main Methods:

• A microlevel accounting approach was employed at six provider locations across five countries: Australia, Canada, Germany, the Netherlands, and Singapore.
• A taxonomy of billing and insurance-related activities (eligibility, coding, submission, rework) was developed and applied to collected data.
• Costs were analyzed using purchasing power parity (PPP) adjustments for cross-national comparability.

Main Results:

• Billing and insurance-related costs for inpatient surgical bills varied widely, from $6 (PPP adjusted) in Canada to $215 (PPP adjusted) in the US.
• Higher costs in the US and Australia were primarily attributed to elevated coding expenses.
• National savings were achieved through task delegation to lower-skill personnel and, more significantly, through more efficient administrative processes.

Conclusions:

• Significant national disparities in healthcare administrative costs exist, with the US exhibiting the highest expenses.
• Microlevel analysis effectively identifies specific cost drivers, such as coding activities, and highlights national system features that reduce these costs.
• The findings provide a pathway for future research aimed at understanding and mitigating administrative waste in global healthcare systems.