2005/11/01 by James G. Kahn, Richard Kronick, Mary Kreger +1 · 3 citations
Economics, Econometrics and Finance · Health Professions · #Healthcare Policy and Management #Medical Malpractice and Liability Issues #Law, Economics, and Judicial Systems
paper · doi:10.1377/hlthaff.24.6.1629
openalex publication_date 2005/11/01 · openalex created_date 2016/06/24 · openalex updated_date 2026/07/07
Administrative costs account for 25 percent of health care spending, but little is known about the portion attributable to billing and insurance-related (BIR) functions. We estimated BIR for hospital and physician care in California. Data for physician practices came from a mail survey and interviews; for hospitals, from regulatory reporting; and for private insurers, from a consulting company. Private insurers spend 9.9 percent of revenue on administration and 8 percent on BIR. Physician offices spend 27 percent and 14 percent, and hospitals, 21 percent and 7-11 percent, respectively. Overall, BIR represents 20-22 percent of privately insured spending in California acute care settings.