It appears that the only player in the health reform debate lacking a
Spending more administrative dollars may be an important part of the solution. Spending less may make the problem worse. Think about that when folks cite low administrative expenses as a goal.
Here's why. There's general agreement that money spent on at least a quarter of treatments is wasted. It would be good to get rid of it. Would we prefer a plan that cost $10,000 per family and delivered optimum care while spending 15% on administrative expense or a plan that cost $15,000 per family and spent only 1% on administrative expenses?
I'd vote for the former plan, which would have to manage care. The latter could keep administrative expenses low by simply hiring clerks to pay claims as they came in. Providers would love it.
A wise friend pointed out that Medicare has extremely low administrative expenses because it does little administration, an obvious point that's widely ignored. That's why you don't see a Medicare task force in McAllen, Texas, demanding changes in a medical culture where expenses per beneficiary are off the charts.
That's why you don't see Medicare interceding when patients scheduled for outpatient surgery are admitted to hospitals solely so they can amass the required hospital stay that's a perquisite to post-operative nursing home care.
In creating a better system, the two key questions are whether optimal care is being delivered at the lowest possible cost. Administrative expense is a distraction.
Politicians who allow patients and providers to distort the debate by assuming that a dollar spent on drugs, hospital care or physician services is well-spent and one used for administrative expense is wasted are pandering in a fashion that greases the tracks of the gravy train instead of slowing it down.