November 19, 2012

Administrators grow like kudzu

In Oklahoma, Market-based, low overhead medical care with transparent pricing as an antidote to Obamacare

To understand how deeply discounted the Surgery Center’s fees are, consider that a nearby local hospital in Oklahoma City, Integris Baptist Medical Center, charges more than $33,000 for a “complex bilateral sinus procedure.”  When the same surgeon performs the same surgery at the Surgery Center, the total cost is less than $6,000. Reasons? The hospital is receiving payment from a third party (insurance company or government), and not the patient, who therefore has no incentive or reason to question or monitor the price. Another reason that the hospital charges 5 times more than the Surgery Center for the same procedure is the huge difference in administrative overhead.  Reason explains:

Except for the clerical staff, every employee at the Surgery Center is directly involved in patient care. For example, both human resources and building maintenance are the responsibility of the head nurse. “One reason our prices are so low,” says Smith, “is that we don’t have administrators running around in their four or five thousand dollar suits.”

When I was in law school one professor after another would call a new law that required regulations to flesh it out, the "full-employment for  lawyers act."  The point is evergreen when you consider how many people called  Sarbanes Oxley, the "full-employment for accountants act"

What I didn't see was how stealthily grew '"administrators" until, in most school districts and colleges, they now outnumber the teachers and professors.  Same thing in hospitals, in unions, in municipal and state governments.  Administrators  grew like kudzu and they didn't need any law to do so.  Lots of regulations helped.

Posted by Jill Fallon at November 19, 2012 10:37 PM | Permalink