American Consequences - September 2018

By Dr. David Eifrig

Not so long ago, one top manager ran a hospital. Usually, a good one. Today, more C-level executives join the CEO... for compliance, information technology, quality management, finance, operations, and more. And each of these “chief officers” has to have his own echelon of administrator underlings and mid-level managers. This chart measures the relative growth in the salaries of physicians and health care administrators from 1970 to 2009. It’s incredible...

NEVER FORGET: THE MEDICAL INDUSTRY IS BIG BUSINESS. Behind every doctor is an administrator... someone whose job it is to go to meetings... type in billing codes... or “adjust” insurance claims. In the past 50 years, “overhead costs” as a share of health care spending have exploded... Today, these overhead administrative costs make up more than 25% of all U.S. hospital expenditures. According to a study published in health care policy journal Health Affairs , $1 out of every $4 that you spend when you go to a hospital goes to bureaucracy instead of patient care.

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