fbpx

American Health Care’s Staggering Administrative Overhead

Marion Mass MD asks where money goes in healthcare. It's shocking, she claims, that we can't see a good portion of it easily.

May 30, 2022

A pie chart.

 

When a group called Citizen Health  crunched the government’s numbers for 2018 to find out where the money was going in American health care, the result was a pie chart — a picture worth a thousand words, some of which aren’t printable.

That pie chart showed that 73 cents of every dollar of the $3.6 trillion national tab for health care that year (it’s now up to $4.3 trillion, but, hey, who’s counting?)  went to people who have nothing to do with actually providing care to patients.

 

Let that sink in.

 

Almost three-fourths of your healthcare-related taxes, your insurance premiums, your out-of-pocket costs do not pay physicians, nurses, nurse practitioners, physician assistants, physical therapists, EMTs, testing labs, and health aides.

 

A 2013 study indicated that American health care’s administrative class outnumbered physicians by 10 to 1.

Between 1975 and 2010, the number of health care administrators grew by 3,200%.

From 1970 to 2018, spending on health care increased by a similar amount.

That spending now constitutes over a sixth of the American economy. How can we not reach the conclusion that most of your money pays administrators (executives, bureaucrats, clerks, assorted paper pushers, and bean counters)?

 

That spending now constitutes over a sixth of the American economy. How can we not reach the conclusion that most of your money pays administrators (executives, bureaucrats, clerks, assorted paper pushers, and bean counters)? Click To Tweet

 

The “apex predators” of healthcare administration do extremely well.

Almost $1.7 billion goes to the top 64 CEOs alone in healthcare-related industries — pharmacy benefit managers (PBMs); information technology companies producing healthcare-related software; healthcare-related data miners; insurance conglomerates; pharmaceutical manufacturers; regional health systems; and the list goes on.

(And make no mistake about it — the lobbying dollar spent by these industries in Washington and state capitals is impressive also.)

How did we get here?

Well, as newsman Ted Koppel once said, “Our society finds truth too strong a medicine to digest undiluted. In its purest form, truth is not a polite tap on the shoulder. It is a howling reproach.”

Nonetheless, here it is — undiluted, impolite, and reproachful.

We’ve voted, legislated, and regulated ourselves into this predicament.

We looked elsewhere while the political class did this to us in the name of doing it “for” us.

In short, we did it to ourselves.

 

Well, as newsman Ted Koppel once said, 'Our society finds truth too strong a medicine to digest undiluted. In its purest form, truth is not a polite tap on the shoulder. It is a howling reproach.' Nonetheless, here it is — undiluted,… Click To Tweet

 

We started small.

In the 1940s, we started to anesthetize ourselves by giving employers who bore the cost of health insurance a special tax deduction.

In the 1960s, Medicare and Medicaid were introduced.

 

In short, we did it to ourselves.

 

At the time, physicians wagged a finger at us, warning us of where this would take us.

(And to be even more tiresome and annoying, those callous, heartless skinflints turned out to be right.)

The original, official estimates of the cost of Medicare were not a little bit low, but wildly, stunningly low.

Medicare’s trustees issue fresh reports from time to time on when insolvency can be expected.

 

And yet there are some who call for “Medicare for All.”

They argue that the simplicity of having the federal government manage the nation’s health care and be the “single-payer” would lead to the reduction of all that costly administrative overhead.

Uh-huh. Remember those original, official estimates of the 1960s?

 

Here’s some more history.

  • 1973: The HMO Act.
  • 2003: MMA (Medicare, Part D; prescription drug benefits, etc.).
  • 2009: The HITECH Act.
  • 2010: The Affordable Care Act (ACA, aka Obamacare),
  • 2015: The little-known MACRA bill.

 

You will be happy to know that there’s an academic who has crafted a justification for American lawmakers not reading the laws they pass and not understanding their consequences in the real world.

All by itself, the ACA, in its early phase, added 11,000 pages of regulation that elaborated on the 2,300+ pages of the law.

 

Death and taxes — you can count on them, right?

You can count on this, too: More regulation = more administration.

Did you know that physicians now spend at least half (and often more) of their time each day on “administrative” work?

Call your lawmakers.

Tell them: “Get smart about unwinding this mess. We need healthcare policy that puts patients first, not corporations, not lobbyists, not a bloated administrative class.”

But don’t expect Washington D.C. or your state capitols to fix this mess.

Start writing: here on SoMeDocs!

Find a grassroots group to join because there is strength in numbers.

 

But don't expect Washington D.C. or your state capitols to fix this mess. Start writing: here on SoMeDocs! Find a grassroots group to join because there is strength in numbers. Click To Tweet

 

Some Worthy Resources to Check Out

If you are a physician: Consider joining  Practicing Physicians of America to push back on middlemen and MOC or Physicians Working Together .

If you are looking for a physician leadership forum, check out American College of Healthcare Trustees.

Want to engage on social media through writing, speaking and networking?  That is Doctors on Social Media all the way!

Want to write?  Here is Physician Outlook!

If you are an ER physician, American Academy of Emergency Medicine  for physicians passionate about physician led care, maybe Physicians for Patients who have been fighting the corporates that prevent physician care or  Physicians for Patient Protection.

Want to own your own credentials and connect with others on the doctors DAO?  Here is HPEC! 

What if you are a patient?

 

Want transparent prices in healthcare?

Patient Rights Advocate is the group to follow.
Care about drug prices and access? Patients Rising Now is for you!
Check out their upcoming free conference on How to be an advocate!
Are you a senior tired of the AARP backing up insurance companies and middlemen?  Association of Mature American Citizens is pushing back on middlemen and promoting transparency and direct care.
Some organizations pulling many together free2Care, now 8 million patients, 70,000 physicians.  Look for their September 15/16 conference in Austin.   And Take Medicine Back is working alongside Free2Care and putting on a conference November 10-13, first 2 days online in Western North Carolina.
There’s lots YOU can do to fix medicine.  Let’s go!
Marion Mass, MD

Marion Mass, MD

“If I can do this, anyone can… I am a recovering soccer mom and a community organizer with an M.D. We can and should take back the stewardship of medicine for the sake of our patients and the future!”

All opinions published on SomeDocs-Mag are the author’s and do not reflect the official position of SoMeDocs, its staff, editors. SoMeDocs is a magazine built with the safety of free expression and diverse perspectives in mind. For more information, or to submit your own opinion, please see our submission guidelines or email opmed@doximity.com. Do you have a compelling personal story you’d like to see published on SoMeDocs? Find out what we’re looking for here and submit your writing, or send us a pitch.

All opinions published on SomeDocs-Mag are the author’s and do not reflect the official position of SoMeDocs, its staff, editors. SoMeDocs is a magazine built with the safety of free expression and diverse perspectives in mind. Do you have a compelling personal story you’d like to see published on SoMeDocs? Submit your own article now here.

Share

Leave a Reply

Your email address will not be published. Required fields are marked *

This learning experience is powered by CMEfy - a platform that brings relevant CMEs to busy clinicians, at the right place and right time. Using short learning nudges, clinicians can reflect and unlock AMA PRA Category 1 Credit.

Of Interest

Subscribe To Our Newsletter

Get updates and learn from the best

[SERIES] Stigmatized

Coming Soon: Stigmatized [SERIES]

Coming Soon: Dr. Jay Joshi hosts this limited time series, in which he brings other healthcare professionals to the discussion table, to cover a stigmatizing topic.

[SERIES] Stigmatized

Coming Soon: Stigmatized [SERIES]

Coming Soon: Dr. Jay Joshi hosts this limited time series, in which he brings other healthcare professionals to the discussion table, to cover a stigmatizing topic.

Jamian Reed, DO

Jamian Reed, DO

Introducing Psychodynamic Osteopathy to find health of body, mind, and spirit.

Alina Olteanu, MD, PhD

Alina Olteanu, MD, PhD

Preventing chronic diseases, including mental health struggles, starts in childhood! Healthy children grow into health adults!

Uday Khosla, MD

Uday Khosla, MD

I am a nephrologist who focuses on developing businesses that support physician independence and improve the healthcare experience for both patients and physicians.

Want More?

Be a part of our healthcare revolution. Don't miss a thing SoMeDocs publishes!

Disclaimer: SoMeDocs assumes no responsibility for the accuracy, claims, or content of the individual experts' profiles, contributions and courses. Details within posts cannot be verified. This site does not represent medical advice and you should always consult with your private physician before taking on anything you read online. See SoMeDocs' Terms of Use for more information.

follow us

© 2024 SoMeDocs. All Rights Reserved.

Soak up our content & grow

Earn CME

Drop your email address below and we’ll email you the link for earning CME (through CMEfy). Please check your spam folder if you do not receive our email. We’ll also add you to our Sunday newsletter, so you can earn more CME credits reading our content!

Support A Platform that Celebrates Real Doctors

For just $10 a month, you can help keep this openly accessible site available to all & help us sponsor in more doctors.

Interested in subscribing
to our unique content?

Interested in subscribing to our unique content?

I acknowledge that this site is not to be used for medical advice.

Play Video
Our Founder Answers Your BURNING Question

SoMeDocs

“Why should I become a member of SoMeDocs if I already have my own space online?”

Site SoMeDocs Logo, square

WANT TO STAY IN THE LOOP?

DON'T MISS A SINGLE CONTENT PIECE.