Aug. 20 (Bloomberg) -- Administrative expenses consume almost $300 billion of health-care spending in the U.S., or 31 percent of the total, according to a study in the New England Journal of Medicine that found a better ratio for Canada.

Costs for staff dedicated to administrative work such as billing and coordination between doctors and insurers add up to more than $1,000 per person each year, according to researchers led by Steffie Woolhandler from Boston's Harvard Medical School. U.S. expenses have more than doubled in a decade, they said.

By contrast, Canada's national health insurance system generates $307 per person in annual administrative costs, or 16 percent of the nation's health-care dollars, the study found. The lower expenses stem in part from a simpler billing system because there's only one insurance system.

Researchers and public health advocates such as Sidney Wolfe from the group Public Citizen used the findings to call for a U.S. health system similar to Canada's. Money saved might be used to cover some of the 41 million Americans who don't have health insurance, they said.

The researchers calculated administrative costs for health insurers, company health benefit programs, hospitals, doctors' offices, nursing homes and home-care agencies in 1999 using published data, surveys and cost reports filed by organizations.

Critics said the methods for calculating costs were flawed and exaggerated the differences between Canada and the U.S. It's almost impossible to accurately identify, calculate and compare administrative expenses, and using a more commonly accepted approach shaves $50 billion off the price tag for the U.S., said Henry J. Aaron, from Washington's Brookings Institution.

``Analytically flawed comparisons with other nations, whose systems differ greatly from our own and that we are most unlikely to emulate, may titillate policy makers and others but provide them with little useful guidance,'' he wrote in an accompanying editorial in the Aug. 21 edition of the journal.

Last Updated: August 20, 2003 17:04 EDT