Tuesday, September 24, 2013

A Plague of Bureaucrats - Now 10 Per Physician in US Health Care

There seems to be a reasonable argument that the US health care system is more dependent on the private sector, and in particular the for-profit private sector, than systems in other developed countries.  Advocates of private, for-profit health care often tout the private sector as more efficient and less bureaucratic than government.  

However, a post by Robert Kocher in the Harvard Business Review blog, of all places, noted that US health care is increasingly inflicted by a proliferation - perhaps a plague - of bureaucrats.

Dr Kocher looked at employment of physicians, other health care professionals and clinical workers, and bureaucrats in a more recent time frame, 1990-2012.  The key findings were:

 Using data from the Bureau of Labor Statistics (BLS) and the American Medical Association, my colleagues and I found that from 1990 to 2012, the number of workers in the U.S. health system grew by nearly 75%. Nearly 95% of this growth was in non-doctor workers, and the ratio of doctors to non-doctor workers shifted from 1:14 to 1:16.


 Today, for every doctor, only 6 of the 16 non-doctor workers have clinical roles, including registered nurses, allied health professionals, aides, care coordinators, and medical assistants. Surprisingly, 10 of the 16 non-doctor workers are purely administrative and management staff, receptionists and information clerks, and office clerks. 

So, in summary, for every doctor, there are 6 clinical workers (nurses, aides, etc) and 10 bureaucrats (including managers).

Note that this data appears compatible with 1983-2000 employment data we summarized in 2005. During that period, the ranks of health care managers grew much faster than the ranks of physicians or nurses.  The growth rates from 1983 to 2000 were 1.39x (39%) for physicians, 1.54x (54%) for nurses, and a whopping 8.26x (726%) for managers.

Another way to look at it is, in 1983 there was 1 manager for every 5.7 physicians and every 15.1 nurses. In 2000, there was 1 manager for every 0.96 physicians and every 2.9 nurses. Again, by 2000, the number of health care managers exceeded the number of physicians. There were more managers than any other species of health care worker other than nurses.

So, by 2000, there was one manager per doctor.  By 2012, there were 10 bureaucrats, including managers, per doctor. 

We have discussed the increasing power of managers, administrators and executives over health care.  Management gurus, such as Alain Enthoven, had advocated breaking the power of the supposed "physicians' guild" to reduce health care costs, and replacing physician leaders with managers (look here).  We have discussed the growing role of generic managers, that is leaders trained only to manage, but not experienced in , and often not sympathetic to the values of health care.  Now there is increasing evidence that managers and bureaucrats are increasingly numerous in health care, the former somewhat and the latter greatly out-numbering physicians.

We cannot scientifically prove that this plague of bureaucrats is responsible for US health care's mediocre quality and access, despite higher costs per capita than in any other developed country.  However, it does appear to be a reasonable hypothesis that increasing the relative numbers of health care professionals versus bureaucrats might produce at least more health care per dollar, if not also better health care per dollar.   

This suggests that true health care reform requires decreasing the influence of generic management.  Health care leaders ought to be those with some knowledge of health care and some sympathy for its values. Such health care leadership might be less concerned with increasing bureaucracy, and more concerned with more and better actual care of actual patients.  (But do not expect such reforms to be popular with the very well-paid generic managers who now run health care, and hence do not expect such reforms to be easy to implement.)


Steve Lucas said...

I have a friend who is a nurse/MBA and now works as an administrator. She will lecture me to no end about how her facility looses money on each patient and is just trying to stay afloat given all the new regulations.

What is not said is that her salary puts her in the top income earners in the county and would rival or be more than many doctors. She also ignores the simple fact that if the facility was loosing money it would close while all the time insisting she is underpaid and should receive a raise.

This cognitive disconnect combined with the more for me attitude is making any medical or treatment reform impossible. Like fast food when you ram product (patients) through the system you get a generic product. Taking the time to properly address an issue produces a better experience, but eliminates many of those high paying administrative jobs.

Steve Lucas

Nancy Erickson said...

Could the growth of the number of bureaucrats in the medical industry be because there are fewer and fewer small hometown doctors, and an increase in the number of conglomerates? Was that ratio included in this?

Roy M. Poses MD said...

Nancy Erickson,

Your hypothesis is certainly plausible.

The data was reported in a blog post, not a full article, so there was little supporting detail, and nothing about this ratio.

Steve Lucas said...

I just cannot stop thinking of the old story of the little town that decided to hire a guy to cut grass and paint. They then hired an accountant due to the large number of purchases for gas and other items, installed a purchasing system, and approved vendors. The City rules were such that you needed a supervisor when you had two or more people working in an area.

The following year, after expanding the City staff, there was a budget shortfall so the decision was made to fire the guy who cut the grass and painted, keeping the accountant and supervisor.

I am sure many in medicine can relate.

Steve Lucas