If private hospitals and clinics mimicked the staffing strategies of the Veterans Health Administration, the former would employ almost 1 million fewer nonclinical workers.
In such a scenario, the financial savings would be enormous and the operational efficiencies vast.
This is according to researchers who compared employment data from the two sectors, focusing on relative ratios of administrative workers to clinicians.
Their key finding: In 2019, close to 30% of all private-sector healthcare employees worked in nonclinical roles while, in the VHA, administrative workers made up only 22.5%.
The figures represent an absolute difference of 6.8 percentage points and a relative difference of 30.2%.
The study’s lead and senior authors are, respectively, Steffie Woolhandler, MD, MPH, and David Himmelstein, MD. Both are affiliated with City University of New York, Albert Einstein College of Medicine and Harvard Medical School.
JAMA Network Open published the study report Jan. 18.
“Nearly 4 million people were employed in healthcare administration in the private sector (excluding long-term care) in 2019, a number that would have decreased by nearly 900,000 individuals had staffing patterns followed those of the VHA,” the authors conclude.
Ratios deliver a dose of reality
For the study, Woolhandler and colleagues analyzed a nationally representative sample of federal and nonfederal personnel in hospitals and ambulatory care settings from the American Community Survey (ACS), all employees reported in VHA personnel records, and personnel in health insurance carriers and brokers tabulated by the Bureau of Labor Statistics (BLS).
The sample comprised 397 occupations in 18 categories.
When they folded in employee headcounts at private-sector health insurers and brokers, along with VHA Central Office personnel with administrative occupations, the researchers found administration accounted for 3.9 million of 13.2 million private-sector employees (29.3%) vs. 77,500 of 343,721 VHA employees (22.5%).
In their discussion the authors comment:
“VHA administration appeared leaner than in the private sector, a finding that clashes with the common perception (even our own) that the VHA is excessively bureaucratized. The VHA’s simpler financing scheme and omission of incentives that encourage financial exertions may outweigh administrative inefficiencies due to government regulations and rigidities.”
‘Trying to avoid paying for care’
In coverage of the study by CUNY’s news operation, Woolhandler suggests the private healthcare sector is marked by administrative “bloat” that largely traces to profit-seeking insurers “try[ing] to avoid paying for care by imposing complex rules and documentation requirements.”
“Our profit-oriented system rewards providers for devoting more resources to gaming the payment system,” Woolhandler asserts.
To this, study co-author Andrew Wilper, MD, MPH, chief of staff at the Boise, Idaho, VHA and associate professor of medicine at the University of Washington, adds:
“In the VHA, caring for our patients—not money—is at the center of our mission.”
Dave P. has worked in journalism, marketing and public relations for more than 30 years, frequently concentrating on hospitals, healthcare technology and Catholic communications. He has also specialized in fundraising communications, ghostwriting for CEOs of local, national and global charities, nonprofits and foundations.