Comparing International Administrative Healthcare Costs

Comparing International Administrative Healthcare Costs

Administration is costliest in nations where surpluses from day-to-day operations are the main source of hospital capital funds: the United States and, increasingly, the Netherlands and England. In such health care systems, the need to accumulate capital funds for modernization and expansion stimulates administrators to undertake the additional work that is needed to identify and pursue profit opportunities.
Himmelstein et al. (2014)

As the cost of healthcare in the United states has continued to rise, researchers have been searching for solutions. Some focused on safety and quality, others on the pharmacy industry, some on MediCare fraud and abuse, and others on single payor systems. In an article published in Health Affairs, Himmelstein et al. (2014) explored the administrative costs of healthcare through the lens of several national healthcare systems.

The study focused on Candada, England, Scotland, Wales, France, Germany, the Netherlands, and the United States (Himmelstein et al., 2014). The authors found that a market oriented system like that found in the United States and growing in The Netherlands and England experience higher administrative costs than different models including separate funding for operations and capital. The lowest administrative costs in this group included Canada and Scotland.

According to the study, separating operating funds may lower the administrative costs of healthcare organizations, and free up resources for patient care (Himmelstein et al., 2014). If the United States were to create a similar system as that of Scotland or Canada, it may help lower costs. Combined with similar shifts in regluations, compliance, litigation, and improvements in safety and quality, these cost savings could be considerably higher.

For CHNR affiliates interested in cost savings, this study will be useful in providing insight into healthcare systems in a few European countries in contrast with the United States and Canada. It will be useful to gather additional data to further explore this area. If you are doing similar research, or would like to collaborate with others in the CHNR community, feel free to use the CHNR forum, or start a conversation in the comments for this post.


Himmelstein, D. U., Miraya, J., Busse, R., Chevreul, K., Geissler, A., Jeurissen, P., ... Woolhandler, S., 2014. A comparison of hospital administrative costs in eight nations: US costs exceed all others by far. Health Affairs,33(9). doi:10.1377/hlthaff.2013.1327


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