Administrative Waste in the US Healthcare System

One of the major wasteful tendencies in the United States health care system is the phenomenon that is known as the administrative waste. In fact, Himmelstein, Woolhandler, and Wolfe (2003) stated that “The U.S. wastes more on health care bureaucracy than it would cost to provide health care to all of the uninsured” (p. 2).

According to the calculation conducted by these scholars in 2003, out of 1.660.5 billion dollars spent by the United States health care system, approximately 400 billion dollars were consumed by the administrative waste (Himmelstein et al., 2003). These wasted costs would be sufficient to provide care to over 40 million of uninsured individuals dwelling in the territory of the country.

The authors report that the percentage of the administrative workforce in the United States health care system grew significantly over the 1990s – the addition of employees constituted about 50% for just one decade; compared to the same statistics in Canada – the United States seems to have unreasonably many administrative workers in health care, especially taking into consideration that the clinical professionals are in shortage.

The system of bureaucracies functioning within the US healthcare facilitates the highly fragmented structure of payment that often results in corrupt practices, inefficient allocation of resources, loss of costs, and a lengthy period of information processing. As a result, the system is very complicated and involves a multitude of instances that carry out functions that could be optimized and speeded up for better effectiveness. In other words, it is possible to make a conclusion that the bureaucracies within the health care system exist not to power the system but to support and multiply themselves thus wasting the valuable resources.


Himmelstein, D. U., Woolhandler, S., & Wolfe, S. M. (2003). Administrative Waste in the U.S. Health Care System in 2003. Web.