What percentage of healthcare cost is administrative burden?

• A. 15-30%
• B. 70-80%
• C. 5-10%
• D. 40-60%

Answer: (A)

Administrative burden covers the time and money spent on nonclinical tasks like billing, claims processing, prior authorizations, coding, and compliance. In the United States, analyses consistently show that this administrative work accounts for a substantial share of total health spending, typically around the mid-teens to about a third of all costs. The 15-30% range captures this widely cited estimate, reflecting the reality that a meaningful portion of resources goes to paperwork and administrative systems rather than patient care. The other ranges don’t align with common measurements: 70-80% would imply almost all spending is administrative, which isn’t supported by data; 5-10% would understate the burden given the extensive administrative workflow; 40-60% would overstate the shared burden relative to most studies.