A demonstrator holds a sign as local politicians and hospital workers protest the closure of Hahnemann University Hospital at a rally outside the Center City facilities in Philadelphia on July 11, 2019. (Photo: Bastiaan Slabbers/NurPhoto via Getty Images)
Industry wants you to think universal healthcare is too expensive. In reality, it’s our current system that’s a wasteful, unsustainable disaster.
Insurers and healthcare providers in the United States spent a staggering $812 billion on paperwork and other administrative burdens in 2017 alone, bureaucratic costs that could be dramatically reduced by switching to a single-payer system like Medicare for All.
That’s according to a study published Monday in the journal Annals of Internal Medicine, which found that administrative costs amounted to 34.2 percent of total U.S. national health expenditures in 2017—twice the amount Canada spent on healthcare administration that same year.
“Medicare for All could save more than $600 billion each year on bureaucracy, and repurpose that money to cover America’s 30 million uninsured and eliminate co-payments and deductibles for everyone.”
—Dr. Steffie Woolhandler, Physicians for a National Health Program
The study’s authors noted that U.S. healthcare providers impose “a hidden surcharge” on patients “to cover their costly administrative burden.” U.S. insurers and providers spent $2,497 per person on healthcare administration in 2017 while Canada spent just $551 per capita, the study found.
“The average American is paying more than $2,000 a year for useless bureaucracy,” said Dr. David Himmelstein, lead author of the study and co-founder of Physicians for a National Health Program (PNHP). “That money could be spent for care if we had a Medicare for All program.”
If the U.S. brought spending on healthcare administration to Canadian levels, the study found, it could save $600 billion a year on total national healthcare expenditures.
“Medicare for All could save more than $600 billion each year on bureaucracy, and repurpose that money to cover America’s 30 million uninsured and eliminate co-payments and deductibles for everyone,” Dr. Steffie Woolhandler, a senior author of the study and co-founder of PNHP, said in a statement.
Himmelstein echoed that point in an interview with TIME. “The difference [in administrative costs] between Canada and the U.S. is enough to not only cover all the uninsured but also to eliminate all the copayments and deductibles, and to amp up home care for the elderly and disabled.”
“And frankly,” he added, “to have money left over.”