You have heard a lot about ‘health care inflation’ over the past 40 years or so. You would think that much of the ‘inflated’ cost of health care would have to do with paying a massive skyrocketing number of highly-skilled physicians, surgeons and specialists, right? After all, these doctors are the most important part of any medical procedure when it comes to figuring out what is wrong with your body, isn’t it?
We have had several surgical procedures over the course of our lifetime. The two most important people I wanted to talk to before the surgery were 1) the surgeon but most especially, 2) the anesthesiologist.
To surgeon: ‘Surgeon, can you perform this procedure really well?’
Surgeon: ‘I have done more thymectomies that any person who has ever lived in Planet Earth. I have done so many of them I could do this one stoned, blindfolded and half-crocked!’
‘Ok, then. You are my man!’
To anesthesiologist: ‘Will I wake up after the surgery?’
Anesthesiologist: ‘Yes, sir, you will!’
‘That is all I need to know. When do we start?’
(unabashed plug for Duke University Medical Center surgeons and anesthesiologists…they were awesome…and right)
If you thought most of the increased costs in health care were going to the physicians and surgeons and specialists, you would be most definitely wrong. Take a close look at the chart that accompanies this article. The number of doctors in America has roughly doubled, perhaps a little more. Perhaps 125% growth. The population of the US has increased about the same amount over the same period of time.
But take a good look at the number of administrators that have been added to the US health care scene in these past 40 years! Over 3000%!
When something, ANYTHING, increases by 3000%, that means the number has increased exponentially, not linearly or even geometrically. 125% growth over 40 years is about a doubling in number. 3000% growth means ‘it has grown in magnificent leaps and bounds’!
If there were 10 doctors in your hometown in 1970, there would be roughly 25 doctors working there today to take care of everyone. If there were 25 administrators in the medical field in your town in 1970, there would be over 750 health care administrators in your town today. Where do you think the increased costs in health care have occurred over that time frame, in doctor’s salaries or what is more commonly referred to as ‘G&A’ expenses (‘General Administrative’)?
The federal government has made it clear that they think the problem is in doctors’ fees since they have repeatedly been lowering the ‘Medicare/Medicaid reimbursement rates’ for the past 2 decades at least.
But they don’t control the salaries of the CEOs and the administrative staff of these large hospitals and medical practices so they can’t ‘lower’ the reimbursement rates to them directly, at least as they can with the doctors.
Are there more or less support staff nowadays than way back when? Think about the elementary school, junior high school, high school you attended perhaps as far back as the Dark Ages of the 1960’s (Triassic Period) or the 1970’s (Jurassic Period). Do you remember tons of ‘other people’ working there other than the great teachers you had and perhaps a principal, assistant principal, some office support staff, coaches and 2-3 driver’s ed teachers?