10 Administrative Workers For Every Physician — Why Healthcare Job Growth Reflects Inefficiency

Despite the many headlines about hospital layoffs, the truth is the healthcare sector as a whole adds jobs month after month. While many consider this a reflection of the industry's strength, a new article in Harvard Business Review by Robert Kocher argues that recent job growth actually reflect a lack of efficiency in the industry.

Kocher, a senior fellow at the Schaeffer Center for Health Policy and Economics at the University of Southern California and a partner at venture capital firm Venrock, argues that the for the additional labor, "most of it is not primarily associated with delivering better patient outcomes or lowering cost," meaning it does little to help organizations meet the triple aim of reform.

According to Kocher and his colleagues' analysis:

"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."

Further concerning:

"Demand and supply are not growing in tandem…Unfortunately, healthcare as an industry continues hiring far faster than demand is growing, adding 119,000 new workers in the first half of 2013, for example, with little increase in patient volume."

Kocher then explores what these 16 workers per physician actually do. According to the analysis, six provide clinical support (nurses, medical assistants, etc.) and 10 — yes, 10! — perform administrative functions. Additionally Kocher argues that many clinical care providers spend too much of their time performing administrative functions below their "level of license," further hurting efficiency.

 

Kocher's analysis and discussion is captivating, especially his discussion on the need for reengineering healthcare delivery so that labor is more efficient. Do yourself a favor and read the full piece here.

Labor inefficiency isn't as often discussed as many of the other areas of cost containment in healthcare, and yet, with labor as the leading driver of healthcare costs, it seems irresponsible to not focus closely on it.

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