Healthcare affordability and administrative burden

Tina Tavares

Anchor Contributor

Healthcare affordability is one of the most important issues facing American families today. Over a decade ago, the Patient Protection and Affordable Care Act (ACA) reformed how hospitals and providers are paid. Payment models shifted from fee-for-service to value-based reimbursement. Instead of being paid based on the number of visits, tests, or procedures performed, hospitals and providers are now reimbursed based on the quality of the care they deliver, with the goal of controlling costs and improving outcomes. While this reform was intended to control costs and increase affordability, it also increased the administrative complexity of healthcare. If the ACA was meant to make healthcare more affordable, why are families paying more than ever?

Over the last decade, premiums have grown to consume about 25% of the average household’s income. Employer-sponsored family premiums now cost nearly $27,000, reflecting a 53% increase over ten years. During this same period, inflation rose 35.8% and wages increased 48.2%. Not only are premiums increasing — they are rising faster than inflation and slightly faster than wages. As healthcare costs rise, Americans effectively earn less because a larger share of their income is diverted toward insurance rather than everyday needs, savings, or emergency funds.

Additionally, employers have increased cost-sharing for employees. Deductibles are rising, now averaging about $2,000. Employers are steering workers toward lower-premium, high-deductible plans that qualify for health savings accounts. High-deductible family plans average around $4,200. Instead of absorbing rising costs, many employers have redistributed more of the financial burden onto employees. When families face higher deductibles, they delay care, skip medications, or postpone preventive visits. These choices are often driven by cost, not medical need — and delayed care frequently becomes more expensive later.

There are many contributing factors to rising premiums, but one of the most significant is administrative cost. Compared with peer nations, the United States spends significantly more on administrative expenses — roughly 30% of excess health spending can be attributed to administrative costs alone. About half of these costs come from insurance-related activities such as eligibility verification, coding, claims submission, and payment processing. The other half comes from administrative burdens placed on providers, including documentation, reporting requirements, compliance standards, accreditation and prior authorization processes. Health systems must expand billing departments, hire additional administrative staff, create compliance teams and invest in complex software systems simply to receive payment. These administrative costs do not directly improve patient care.

As documentation requirements tied to reimbursement have increased, less clinical time is dedicated to direct patient care. When documenting a task takes longer than the task itself, we are prioritizing the quality of documentation — not the quality of care. Providers’ time is not infinite. Every hour spent completing administrative requirements is time lost at the bedside.

Limited clinical time can delay responses to call lights, delay rounding, overwhelm workflows, increase the risk of medical and medication errors, raise infection risk, and contribute to preventable falls. In a high-pace, high-acuity environment, even small delays increase the risk of preventable complications. Falls, infections, and medical errors are not only harmful — they are costly. Those costs do not disappear; they return in the form of higher insurance premiums and higher out-of-pocket expenses.

This is not just what clinicians, a nurse myself, are feeling — research reflects it. Studies show nurses spend a large portion of their shifts completing documentation and navigating electronic health record requirements that would otherwise be spent providing direct patient care. Other research examining missed or delayed nursing care shows associations with higher rates of adverse events, including complications and mortality. What nurses’ experience on the floor is supported by the data.

The ACA’s payment reform was intended to create a system that would control costs, but that system cannot succeed if providers are pulled away from the bedside to complete increasing administrative tasks. For value-based care to work as intended, reforms must address not only how care is measured, but also the administrative infrastructure that has grown around it. Without addressing the burdens placed on providers, rising premiums and declining affordability will continue to challenge the American healthcare system.

Americans deserve a healthcare system that prioritizes patient care, not paperwork. If we truly want healthcare to be affordable and safe, we must acknowledge the elephant in the room and reduce administrative waste. As healthcare costs continue to rise, voters should ask their elected officials how they plan to simplify the system, reduce administrative waste, and return time to the bedside because affordability and patient safety depend on it.