Administrative simplification: How to save a quarter-trillion dollars in US healthcare

Perspectives on the Productivity Imperative in US Healthcare Delivery

Every organization or large-scale system needs a base of administrative functions to run. As these functions adopt new technologies and innovations, spending typically drops and quality improves. Consider payment processing, which is faster and cheaper than ever, or signing up for a new mortgage, for which you can get preliminary approval on your phone in minutes. Despite generations of technological advancements, however, the US healthcare system remains stuck: productivity and quality have stagnated, and change has been slow.1

Of the nearly $4 trillion spent on healthcare annually in the United States, administrative spending is about one-quarter of the total; delivery of care is about three-quarters. But what portion of that administrative spending is unnecessary, and how can it be simplified?