Healthcare Administrative Costs Are Up 270% Since 2017.
Of the many numbers circulating in BC’s election campaign, one deserves more attention than it has received: administrative costs in BC’s healthcare sector have risen 270% since 2017, reaching $3.8 billion annually. That figure requires some qualification. It is not the same measure as the health authority corporate services ratio tracked by CIHI, which has remained relatively stable at around 3.5%.
The $3.8 billion figure uses a broader definition of administrative cost, capturing not only traditional corporate functions but also administrative burden embedded in clinical settings, coordination overhead created by a fragmented system, and the transaction costs generated when patients, providers and organisations have to navigate between disconnected parts of the healthcare system.
That distinction matters because healthcare administration does not live only in head offices. If the problem were simply too many people working in finance, HR, procurement and corporate services, the solution would be relatively straightforward: consolidate functions, standardise processes and eliminate duplication. But a significant amount of administrative work is generated by the way care itself is organised. Every referral, handoff, duplicate assessment, disconnected record, missed communication and transition between services creates work. Someone has to make the phone call, complete the form, chase the referral, reconcile the medication list, find the missing report or explain to the patient what happens next. Much of that work is performed by people whose job titles are clinical, so it is largely invisible when administration is measured only through corporate spending.
The BC Greens have identified the broader figure as a systemic problem warranting a structural response. Their proposal, a Community Health Centre in every BC riding, designed to streamline complicated referrals and deliver comprehensive care in one place, reflects a coherent logic. If a significant share of healthcare administrative cost is generated by fragmentation, coordination overhead and unnecessary system navigation, then integration is not simply a quality improvement strategy. It is also an efficiency strategy.
This is particularly important for people with complex and chronic health needs. A person living with diabetes, cardiovascular disease, mobility problems and social needs may interact with primary care, specialists, pharmacy, rehabilitation, dietetics, mental health services and community organisations. If those services operate independently, the patient and their family become the connective tissue between them. The system effectively outsources coordination to the patient. That may be manageable for someone with time, confidence, transportation and health literacy. It is considerably less manageable for an older person, someone living on a low income, someone without a regular primary care provider or someone already struggling with multiple health and social challenges.
Where Administrative Burden Actually Lives
The common political framing of administrative costs focuses on head office functions such as HR, finance, legal, procurement and executive administration. These are real areas where efficiency matters, and BC’s new shared services organisation is designed to address some of this duplication, with an anticipated $60 million in annual savings through consolidating duplicated functions. That is worthwhile, but $60 million is a fraction of $3.8 billion.
The larger burden lives throughout the care system. It is the time physicians spend documenting and processing referrals rather than treating patients. It is the nurse who spends hours coordinating services because no one else is responsible for doing so. It is the specialist's office repeatedly requesting records that already exist elsewhere. It is the pharmacist trying to clarify a medication change. It is the patient who has to tell their story repeatedly because information has not followed them between services. It is also the increasingly complex navigation required to access community-based supports.
A patient may be told that exercise, nutrition support, falls prevention, smoking cessation, mental health services or social support could improve their health. But knowing that a service exists is not the same as being able to access it. If the healthcare system does not provide a coordinated pathway, the burden of finding the service, determining eligibility, making the referral and following up often falls to the patient or clinician. That is administrative work. It simply does not always appear in an administrative budget line.
The 2025 OurCare national survey found that 71% of respondents without a primary care provider had paid out-of-pocket for an appointment. This is one illustration of what happens when system capacity and navigation fail. The cost does not disappear because the public system does not absorb it. It is transferred to patients. And that burden is not distributed equally. People with greater financial resources can pay for private appointments, transportation and other services when the public system is difficult to navigate. People with fewer resources are more likely to wait, go without care or rely on emergency services when their needs escalate.
Integration as an Efficiency Strategy
The evidence on integrated care supports the underlying argument. Integrated care programs for patients with multiple chronic conditions reduce hospital and emergency admissions, reduce readmissions, and lower average costs per capita. The mechanism is relatively straightforward. Integration reduces the number of times work has to be repeated, creates shared information, clarifies accountability and makes it easier for professionals to see what other members of the care team are doing. It reduces the likelihood that patients fall through gaps between services.
BC’s existing 16 community health centres provide a useful example. These centres are designed to combine primary care with social services and other supports in integrated settings. Their significance is not simply that they provide another location where people can see a healthcare professional. Their potential value lies in bringing different functions together around the needs of a defined population. For someone with multiple chronic conditions or complex social needs, this can reduce the number of organisations they have to navigate and make it easier for professionals to coordinate care.
This matters because many of the factors influencing health sit outside traditional clinical care. Housing, income, food security, transportation, social isolation and access to community resources can all influence health outcomes. A system that treats these issues as entirely separate from healthcare will inevitably spend more time managing their consequences. Community health centres cannot solve all of these problems, but they create a structure in which health and social needs can be considered together.
Can Technology Help?
Technology is often presented as the answer to healthcare fragmentation, and better electronic records, digital referrals and information sharing are certainly important. But technology alone does not create integration. A fragmented process can simply become a digitally fragmented process. If five organisations each have their own workflows, referral requirements and accountability structures, putting those processes online does not eliminate the underlying duplication. It may make the transactions faster, but there can still be five transactions.
The more fundamental question is whether the system has been designed around the patient journey rather than around individual organisations. Technology should support that architecture, not substitute for it. Integration can happen through physical co-location, shared teams, coordinated virtual services or a combination of all three. What matters is whether responsibility for coordination sits within the system rather than being transferred to the patient.
The BC Greens’ proposal to expand community health centres to 93, one per riding, is ambitious in both scale and timeline. Whether that precise number or implementation model is ultimately the right approach deserves detailed evaluation. The broader argument, however, is much harder to dismiss. BC needs to consider whether healthcare should continue to be organised primarily around institutions and professional silos, with patients moving between them, or whether it can increasingly be organised around the needs of the populations those institutions collectively serve.
This is also why reducing administrative costs should not mean simply cutting the people who perform administrative work. Many of those people are compensating for structural problems elsewhere in the system. Remove the coordinator without removing the fragmentation and the work does not disappear. It shifts to a nurse, physician, patient or caregiver. The objective should be to eliminate unnecessary work, not simply to eliminate the person currently doing it.
The $3.8 billion figure therefore deserves closer scrutiny, regardless of where one sits politically. If it is being used to describe the broader administrative burden generated by BC’s healthcare system, then the policy response needs to look beyond corporate offices. The $60 million expected from shared services consolidation may be worthwhile, but it addresses only one layer of the problem. The larger opportunity lies in redesigning how care is delivered so that coordination is built into the system rather than repeatedly recreated by the people working within it.
The next government will need to address healthcare administration while also improving access and outcomes. These objectives do not necessarily require choosing between efficiency and better care. A healthcare system that makes it easier for patients to access the right service, gives clinicians the information they need, coordinates care across disciplines and addresses health and social needs together should also generate less unnecessary administrative work.
The question for BC’s next government should therefore not simply be, “How do we cut healthcare administration?” It should be, “Why is so much administrative work necessary in the first place, and what would we have to change so that it no longer is?”
That is the question that moves the conversation from cutting costs to redesigning the system.
IHSTS does not endorse or support any political party. Our commitment is to evidence-based health system transformation, regardless of who forms government. We engage with policy ideas on their merits - and the evidence for integrated, community-embedded care is strong across the political spectrum. Learn more at ihsts.ca.
