alt Hacker NewsThe administrative overhead is not trivial: probably about 25%.
Worse is the distortion of incentives for healthcare providers. The giant leaky insurance tit is there to be sucked on, creating corruption at every level.
When you are billed for a procedure you have no idea how much you are going to get charged or what you could get billed for. There could be gigantic opaque charges for things you have never heard of. Ticketmaster could only dream of such a rip-off.
Not to mention blatant over-billing for unnecessary diagnostics, etc. Every year new kickback schemes are discovered.
25% of what, and where are you getting that number? JAMA studied this on an encounter-by-encounter basis and found BIR costs were in the tens of dollars for normal visits to low (100-300) for inpatient surgery.
Price transparency is a real problem. Overbilling is a real problem, so is overprescription. Important to keep in mind that those are on the provider side, not the payer.