Health care spending in the United States reached about 18 percent of GDP in 2024, totaling $5.3 trillion, or roughly $15,474 per person. That’s dramatically higher than peer countries, which average around 11 percent. Yet patient outcomes haven’t kept pace.
Two major, interconnected problems stand out: exploding administrative overhead that diverts money away from actual care, and a systemic preference for treating problems after they occur rather than preventing them. These issues raise costs and often make care more complicated and less effective.
The administrative jungle: prior authorizations, peer reviews, and overhead
A big chunk of rising costs comes from layers of bureaucracy around delivering care. Health care organizations spend enormous resources on compliance, rules, regulations, prior authorizations, and insurance-mandated reviews. This money largely goes to administration instead of doctors, nurses, or patients.
Administrative costs in the U.S. health care system run much higher than in other countries. Estimates put them at 15 to 30 percent of total spending, compared to roughly half that or less elsewhere. The U.S. spends about $925 to $1,078 per person on health administration versus $245 (or lower) in comparable countries.
Prior authorization requirements create massive friction. Physicians and staff spend hours each week seeking approval for tests, procedures, or medications. Recent surveys show doctors complete around 39 to 45 prior authorizations per week, eating up about 13 to 14 hours of their time. A large majority of physicians report that these delays lead to higher overall health care resource use, including more office visits and even emergency department trips. What was meant to control costs often backfires by delaying care and increasing downstream expenses.
Peer review adds another layer. Insurance companies hire other physicians to review charts and second-guess the doctor who actually examined the patient face-to-face. The reviewer works from notes alone, without seeing the patient or picking up on nuances that records don’t capture. It’s an odd setup: one clinician, paid by the insurer, questioning another based mainly on documentation and coverage guidelines. Many doctors find it demoralizing and inefficient.
The result? Higher overhead is passed on through premiums, with less time for actual patient care. Far from saving money, these processes shift dollars from direct care to insurance and hospital administration.
Treatment over prevention: paying more later for problems we could have avoided
The second major driver is our heavy focus on treating illness and injury after it happens, rather than investing in prevention. A Prevention Prescription for Improving Health and Health Care in America emphasizes prevention’s potential to reduce national spending.
Take hip fractures in older adults as a clear example. We invest heavily in advanced surgeries, implants, and rehab. These are impressive, but far less goes toward simple preventive measures like grab bars in showers, better home lighting, balance training, or medication reviews to reduce fall risk. Preventing the fall spares the patient pain, disability, and the system the much higher costs of surgery and follow-up care. One analysis of the return on investment of evidence-based falls prevention programs shows significant per-participant savings, with a mean of roughly $3,904, and a strong return for community-based programs. Similar patterns show up with chronic conditions like diabetes, heart disease, and obesity, where complications drive enormous downstream expenses.
When straightforward issues aren’t managed early, sometimes delayed by prior authorizations or other hurdles, they spiral. A simple problem becomes complex, leading to side effects, more treatments, disability, and higher long-term costs. We end up spending more after the fact instead of addressing things simply and effectively.
The human and economic toll
These dynamics hit real people hard. Physicians face burnout from battling insurance requirements. Patients deal with delays, denials, and fragmented care. The financial burden lands on everyone via higher premiums, taxes, and out-of-pocket costs. In California, administrative pressures, regulatory burdens, and other factors contribute to physicians leaving practice or the state, worsening access issues.
Evidence from groups like the Commonwealth Fund, Peterson-KFF, and others consistently flags administrative complexity as a top reason U.S. health care costs so much without better results. Prevention-focused programs, such as fall prevention initiatives, have shown real promise for savings and better outcomes in studies.
California’s strict regulations, liability concerns, and oversight add to operational costs and contribute to physician dissatisfaction. Administrative overhead worsens burnout and shortages, while a reactive treatment focus amplifies costs from chronic conditions and delayed care. The result is an affordability crisis affecting families, higher state spending, and uneven access, worse in rural areas and low-income populations.
California faces a significant shortage of primary care physicians and specialists, especially in rural and underserved areas. Projections show a shortage of thousands more providers by 2030. Burnout from administrative loads, low reimbursements, high living costs, and regulatory pressures has led to physicians leaving the state or retiring early. Over 11 million Californians live in primary care health professional shortage areas.
The end of enhanced ACA subsidies is causing sharp premium hikes, with averages of roughly 97 percent in Covered California for some, leading to more uninsured residents and further pressure on the system.
Moving toward solutions
Fixing this will take changes on multiple levels. Simplifying prior authorizations (some states and insurers are testing “gold card” programs for high-performing providers), rethinking peer reviews, and shifting payment models toward prevention and outcomes rather than service volume could help. Stronger investment in public health measures like home safety and lifestyle support would pay off by reducing expensive interventions later.
The core problem is misalignment: Too much money and energy go into navigating the system instead of delivering or preventing care. It won’t be easy, but reducing administrative waste and tilting toward prevention offers a practical way forward. Patients, physicians, and the system as a whole would benefit if we could clear some of those trees and see the forest again.
Kayvan Haddadan is a physiatrist and pain management physician, and president and medical director of Advanced Pain Diagnostic & Solutions, a multidisciplinary pain management practice in California that he founded in 2012. A physician and surgeon licensed by the Medical Board of California, he is double board-certified in pain medicine and physical medicine and rehabilitation. He is also certified in controlled substance registration through the DEA and serves as a qualified medical examiner through California’s Department of Industrial Relations Division of Workers’ Compensation.
Dr. Haddadan earned his Bachelor of Science degree from the College of Alborz in Tehran, Iran, and his medical degree from Shahid Beheshti University of Medical Sciences. He later received his Educational Commission for Foreign Medical Graduates certification in Philadelphia, completed an internship in medical surgery at Loyola University Medical Center’s Stritch School of Medicine in Illinois, and finished his residency in physical medicine and rehabilitation at the same institution. He completed his fellowship in pain medicine at California Pacific Medical Center’s Pacific Pain Treatment Center and also trained in medical acupuncture for physicians at the University of California, Los Angeles David Geffen School of Medicine.
Dr. Haddadan has contributed to 29 research publications across multiple specialties, including pain management, cardiology, pulmonology, endocrinology, gastroenterology, and infectious disease. His work has examined topics such as hyperlipidemia in high cardiovascular risk patients, hyperuricemia and gout management, type 2 diabetes and hypertension, chronic obstructive pulmonary disease and asthma therapies, influenza treatment, irritable bowel syndrome, and opioid related complications in chronic pain care. His research has also included clinical outcome studies in spinal cord stimulation and award-winning presentations on neuropathic pain management and neuromuscular disorders.
