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The administrators are a direct consequence of insurance-mandated budgeting. You can't seriously argue that they're caused by "regulations" when front-line doc

The administrators are a direct consequence of insurance-mandated budgeting. You can't seriously argue that they're caused by "regulations" when front-line doctors are having to call insurance companies from their offices to get clearance for life-saving procedures. Or when patients having an emergency have no idea how much treatment will cost because their insurance company has to work out whether treatment will be in/out of network, what the co-pays and deductions will be, and other bureaucratic friction which has nothing to do with providing care and everything to do with profitability. The US has the highest per-capita spending on health, and also the highest level of personal bankruptcies caused by health insurance. It's quite a strange point of view to consider that latter point any kind of win.

ETH_start 4y ago
Regulations make the provision of healthcare and health insurance more complex, so seem like the most probable culprit. The decline in the share of healthcare spending constituted by out-of-pocket spending, due to growing insurance-mandated budgeting, could very well have played a role in the growth of healthcare costs, and I believe it did. But two points: 1. Those mandates are regulations, so this development doesn't contradict the thesis. 2. Out-of-pocket spending declined from 44 percent of total spending, in 1965, to about 10 percent today. That can't explain a 32X increase in the number of hospital administrators. It is probably one component, among the many that are responsible for the growth in the number of hospital administrators.
- ETH_start 4y ago
  To elaborate on 1: the rise in the reliance on third party payers has been mostly due to the steady expansion of Medicare/Medicaid, and the piling on of laws that encourage reliance on health insurance over out-of-pocket healthcare spending, like "Patient Bill of Rights" laws that probibit all but the most comprehensive health insurance plans, and rule out catastophic-only plans that were at one time more common: https://archive.is/GHjIl https://archive.is/GHjIl

ETH_start 4y ago

Regulations make the provision of healthcare and health insurance more complex, so seem like the most probable culprit. The decline in the share of healthcare spending constituted by out-of-pocket spending, due to growing insurance-mandated budgeting, could very well have played a role in the growth of healthcare costs, and I believe it did. But two points: 1. Those mandates are regulations, so this development doesn't contradict the thesis. 2. Out-of-pocket spending declined from 44 percent of total spending, in 1965, to about 10 percent today. That can't explain a 32X increase in the number of hospital administrators. It is probably one component, among the many that are responsible for the growth in the number of hospital administrators.

ETH_start 4y ago
To elaborate on 1: the rise in the reliance on third party payers has been mostly due to the steady expansion of Medicare/Medicaid, and the piling on of laws that encourage reliance on health insurance over out-of-pocket healthcare spending, like "Patient Bill of Rights" laws that probibit all but the most comprehensive health insurance plans, and rule out catastophic-only plans that were at one time more common: https://archive.is/GHjIl https://archive.is/GHjIl