Where Does The Money Go?

87% of US healthcare spending goes to patient care, according to US government statistics provided to the OECD. The remaining 13% is spent on administrative and other expenses.

These figures don’t pass the sniff test. Physicians and registered nurses are less than 20% of the healthcare workforce. There are simply too many people working in healthcare who are not seeing or helping patients for these figures to accurately reflect where the money is going.

Healthcare spending breakdowns like this one tend to be misleading because they are typically reported by venue (i.e. hospital, clinic, etc…). So all of a hospital bill will be categorized as “patient care” when there are substantial portions of the bill that are attributed to administration, capital costs, and profits.

Tomorrow, we will discuss our own cut of the data looking at true patient-facing spending broken out from administrative and operating costs.