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PaperclipPerfector  1yr ago (text post)   31304 thread views

Culture War Roundup for the week of May 15, 2023

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So like, where is the money going? If healthcare costs so much in the US, who is getting paid more? Who is getting paid to do irrelevant work? Who is getting massive returns on investment?

This is a take with only anecdotal evidence but from the stories from my Doctor SO at a public hospital, a substantial amount of the money is just covering the majority of patients who will never pay a dime. Homeless frequent fliers, those who will go to collections and have the debt sold for nothing, ect. ect. Every hospital visit by someone who will see the price and begrudgingly pay it is subsidizing some number of visits by people who will not.

Drive to a hospital. Notice the giant office building the hospital is in the shadow of.

I don’t think France or Canada or Taiwan have that.

Of the OECD countries America has the third fewest doctors per Capita. U.S. Doctors have the highest average pay and average net worth. Med Schools began to limit the number of graduates in 1980 leading to the number of med school graduates shrinking relative to the population from 1980 to 2005 (figure 4). The U.S. government also ceased giving grants for the construction of new med schools under Reagan. The 1997 budget act limited residency slots as a cost-saving measure though that was repealed under Obama.

The AMA and the Graduate Medical Education National Advisory Committee predicted that there would be a physician oversupply in 1980, this could be just bad demography or you could note that restricting the supply of future physicians helps keep wages for current physicians high and current physicians are the membership of the AMA. A lot of it is also penny-wise pound foolish thinking from the government. Cutting residency slots and not building new med schools saves money in the short term, but as long as you're committed to paying for the medical care of the poor and elderly you're going to have to purchase doctors labor so you want to keep the supply of doctors high.

Doctors' salaries aren't the main cause of healthcare spending, it's maybe 8-10% of the overall costs. But increasing the number of residency slots and the supply of doctors seems like the low-hanging fruit of health care reform that avoids major ideological schisms.

A lot of it is going to more quantity of more advanced healthcare. When someone spends a billion dollars developing a new drug or medical device, that money has to come from somewhere. And then when your uncle gets their advanced cancer treatments... And what else would the US do with our massive GDP and large number of old people? Old but good RCA post: http://web.archive.org/web/20230410210109/https://randomcriticalanalysis.com/why-conventional-wisdom-on-health-care-is-wrong-a-primer/

I couldn't say for everywhere, but in hospitals, the largest driver of healthcare spending, at least, a lot goes to administrative bloat: "A Harvard Business Review analysis shows the healthcare workforce has grown by 75 percent since 1990 . . . But there’s a catch. All but five percent of that job growth was in administrative staff, not doctors."

For the broader healthcare sector including VPBs and Pharma, as with all rent seeking systems, a fair amount presumably also goes to shareholders (excluding nonprofits) and top line executive compensation.

Sweden has a growing cost/efficiency problem with our healthcare system as well and the identified main cause is growing administrative bloat.

The interesting thing is that while documentation requirements have gone up (partially and possibly mainly due to privatisation) that isn't perceived as the main driving factor to the bloat.

The main driving factor is that the administrative department isnt doing administrative work related to the hospital care. They are engaged in more prestigious make work they create for themselves, like creating "strategic communication plans", leaving the health care professionals to deal with the actual administration despite massive administrative departments.

This is perceived as a black hole that can consume an endless amount of resources without ever helping the core business.

You wouldn't happen to have anything written in English on that would you? I might try to do a deeper dig in the topic for an effort post later on.

No, sorry. I'm not deeply immersed in this, it's just a narrative that has developed in media, among doctor friends of mine and some researchers.

If you search for news articles on the matter you're most likely going to find people decrying the unnecessary amount of administrators, noting of the rapid growth of administrators compared to caregivers.

Like this in the doctor union news paper: https://lakartidningen.se/aktuellt/nyheter/2022/11/kraver-mindre-administration-och-byrakrati-tjanstemannavalde/

When I said that the perceived reason wasn't necessarily demands for increased administration that caused bloat, i was referencing researchers studying the issue said in articles I've read in the paper and in tv interviews. I wasn't able to find any free articles on it after googling a little unfortunately.

There seems to be a growing consensus that we need to cut down on administrators but even when there has been explicit initiatives to cut down the number of administrators have kept growing. https://www.dagenssamhalle.se/samhalle-och-valfard/sjukvard/vardbyrakratin-svaller-sa-har-ostergotland-minskat-administrationen/

Now there are hiring freezes for new administrators in multiple regions/large hospitals but I'm sceptical. https://lakartidningen.se/aktuellt/nyheter/2023/04/karolinska-satter-stopp-for-ny-administrativ-personal/

Thanks for this as well as the other comment of added context.

See also: American universities.

The defense in the article is

“There’s just more and more layers of stuff that hospitals and physicians’ offices—anyone in healthcare—is being asked to do. Documenting and meeting regulatory requirements—all of these have added to the demand,” Selberg told Healthline. “Has that demand actually gone into creating better outcomes…in less time and with lower costs? I think, as the blog described, the answer is no.”

It's hard to know whether this is accurate or not without finding a trustworthy expert. But if "administrative bloat" is where all the money is going, and if there is no good reason for it, this seems more like a symptom of the lack of competition, which is driven by a ton of factors (failures of governments to prevent monopolization, lack of transparent pricing, etc.).

I know you were explicitly asked "where is the money going", but I think it's worth being clear that "where the money is going" is not necessarily the area where Solutions need to be directed. Blaming "administrative bloat" is like blaming "corporate greed" when the paper mill dumps too much pollution in your river. One of the government's core jobs is keeping people's incentives aligned with being pro-social. Forcing hospitals to downsize or pay administrators less (or whatever) is treating a symptom of the overall screwed-upped-ness of legislation of the medical system.

No disageement with the administrative bloat vs corporate greed comparison, but he does outline an upstream policy driver pushing the bloat: an increasing regulatory load that needs more staff to push papers. No clue if that's right either.

Separately, one of the panelists did recommend strengthening hospital price transparency, but I kind of wonder if it would even be a problem if hospitals weren't de facto monopolies. It's not like we need to legislate normal businesses into telling you their services cost.

Well okay, but what are those administrators doing? Is it compliance? Is it some moral mazes thing? Is it HIPAA? I must admit, it would be grimly amusing if the worst law in Modern American History passed 100-0 in the senate. What do you even do with American Democracy at that point?

I think that this somewhat old (ca. 2015) essay series on exploding costs in Healthcare in the US is interesting and worth reading.

The TL;DR is that there has been a plethora of outsourcing of core functions of healthcare-related companies, at the same time as more healthcare has been able to be provided through the march of technology. The US and larger companies have attempted to solve the issue by requiring more and more 'accountability' (which requires paperwork, man-hours, and ultimately employees to be paid).

When one company employs specialists in finding obscure reasons to deny coverage of claims to patients due to paperwork errors in their Byzantine medical coding system (which are coded by medical coding specialists), and another company employs specialists in appealing the denied coverage and proving the patients should be covered after all - all of those people's paychecks are ultimately coming out of insurance premiums, and making the system cost more. As more companies proliferate in the system, they all try to push the costs of the system onto each other - but since the costs will all ultimately get paid by someone in the end, the net result is that there is a huge amount of paperwork and people employed in thrashing out who exactly is responsible for each and every expense.

Still, though, you get a better sense of the details by reading the whole thing, so I recommend doing that.

As an actuary in healthcare (arguably part of the problem) I heartily recommend that article.

I've also heard complaints from doctors themselves that more of their time is being taken up by paperwork rather than actually seeing patients. A doctor that spends half their time seeing patients and half doing paperwork is going to need to charge twice as much per patient as a doctor who just spends all their time seeing patients.

Didn't administration get bloated over decades? I think this applies to other fields as well, infamously teachers rarely see any of the increases to education funding.

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