After
reading Christopher Westley's fine article, The
Carriage-Trade Trend, I got to thinking about the imminent
demise of the health-care industry in this country. After earning
my living in this business for thirty-eight years, I feel kind of
attached to it, and I will be sorry to see it go. Why does this
have to happen? I went looking for some facts and figures.

I
wish that the private organizations of private businesses would
collect and publish their own statistics. Apparently they let their
"parent" organization, the federal government, do it for
them. I'm sorry I had to resort to state sources, but there it is.

To
explain the failure of this business, my own hypothesis is twofold;
one, that the state won't pay for the obligation it has undertaken,
and two, that the bulk of the money earmarked for health-care goes
to pay for state mandated bureaucracies and not for health-care.

The
first issue is pretty straightforward. Imagine that you could selectively
decide to pay for only certain items on your auto mechanic's bill
after the work was done. Imagine that the mechanic was forced to
take what you paid without recourse to any system of justice. Imagine
that it was the law. That's how it works. A full-time staff at the
Medicare third-party-payer contractor's office, read insurance company,
changes the billing rules and the billing codes willy-nilly. One
day your electrocardiogram is paid, one day it isn't. The advisories
fall like rain into the offices of health-care providers, who must
necessarily employ a full-time staff to keep track of them. One
little mistake in a multi-digit code means no money. But then they
only pay a percentage of whatever charge they approve, so maybe
you have to charge $1253.00 for a procedure to get $550.00 in your
bank account, which, after you subtract wages, taxes, and the overhead
of maintaining your own personal bureaucracy, means that you may
end up with 10% of what you charged. This socialist reality drives
some private practitioners into true private practice — cash only;
others it drives out of the business altogether. (I don't think
mechanics would like it either.)

To
address the second issue, I asked myself this question: For every
health-care professional, how many non-professional clerical workers
are there in health-care related bureaucracies? I wanted to include
and count everybody working in hospitals, clinics, DME offices,
doctor's offices, city, state, and federal health-care offices,
and third-party-payer insurance company offices, and then compare
the numbers.

I
searched for the numbers of people employed in 1960, five-years
before Medicare, and for the numbers of people employed in 2000,
thirty-five years after Medicare. Alas, I could not find these numbers.
However, I did find some numbers that were pretty interesting.

In
1983, for example, there were 6,888 "registered hospitals"
in this country and 36,703 "administrators and assistant administrators".
Ten years later, in 1993, there were 6,467 hospitals and 69,393
administrators. Say what? The number of hospitals declined and the
number of administrators nearly doubled. It looks like an epidemic.

In
the same time period, the number of Registered Nurses working in
these hospitals went from 770,846 to 958,966. It appears that this
modest increase in the number of nurses required a whopping increase
in the number of administrators. Of course, there is no correlation
between nurses and administrators; health-care cannot do without
nurses. Bureaucracies just grow, it's what they do. (One hospital
where I worked had twenty-nine managers for twenty-five patient
beds.)

On
the key issue of the growth rate in the number of clerical staff
involved in getting medical bills paid or not paid, I nearly drew
a blank. One
source that had numbers declared that the number of people employed
in 2000 in "Medical Service and Heath Insurance" was 381,000,
and in "Hospital and Medical Service Plans" was 304,000.
That means, I take it, that 685,000 people were employed as clerical
workers by third-party-payer health insurance companies who contract
their services to Medicare. Technically, they are not government
employees, though in reality their paychecks come from taxes.

I
could not find any numbers for insurance company employees prior
to 2000, so I don't know their growth rate. I would really like
to know how many pencil pushers worked for these outfits in 1960.
I hope that somebody who knows will tell me.

So
maybe I'm not much of a research kind of guy and I can't prove my
hypothesis after all. But I do have a rule of thumb; I call it the
parking-lot rule and you can prove it for yourself. Drive through
any hospital parking lot on any day of the week and count the empty
parking spaces. Then drive through on any weekend or holiday and
count the empty parking spaces. You will see a marked difference.
The difference is, the bureaucrats don't work on weekends. Count
their numbers.

August
6, 2001

Robert
Klassen [send him mail] is
a medical technician and writer. Here’s
his web site.