Healthcare administrative and bureaucracy costs in the U.S. reached $812 billion in 2017––a whopping four times higher than Canada, according to a new study published by Harvard researchers in the Annals of Internal Medicine. And Medicare for all could be the way to achieve huge savings.

In fact, bringing down U.S. paperwork costs to Canada’s levels would save more than $600 billion. In 2017, the cost of healthcare bureaucracy was 3.42% of total expenditures for doctor visits, hospitals, long-term care and health insurance.

“The care delivery systems––doctors and hospitals––are closely similar in the US and Canada, but their payment systems are markedly different,” authors David U. Himmelstein, MD––an internist in the South Bronx, a professor at CUNY's Hunter College and lecturer in Medicine at Harvard––and Steffie Woolhandler, MD, MPH––a professor of public health and health policy in the CUNY School of Public Health at Hunter College, adjunct clinical professor at Albert Einstein College of Medicine, and lecturer in medicine at Harvard Medical School––told Health Exec. “Hence, the comparison to Canada provides convincing evidence that a change in the way we pay for care would likely result in vast savings on paperwork and bureaucracy.”

The researchers examined health administration costs since 1999 and analyzed thousands of accounting reports filed to regulators by hospitals and other healthcare providers as well as census data.

Part of its success is Canada’s single-payer system, which significantly cut down on administrative costs and was implemented in 1962. Per capita health administration costs in the U.S. were more than four times higher than in Canada––$2,479 per person vs. $551. In the U.S., Americans spend $844 per person on insurers’ overhead compared to just $146 in Canada in 2017.

Hospital billing, which is complex in the U.S., cost significantly more as well––$933 per person in the U.S. vs. $196 in Canada. Canadian hospitals are financed through lump sum global budgets instead of fee-for-service in the U.S. And switching to global budgets could potentially work in the U.S., too.