Hospital administrative cost claims and private equity ownership

Even if we take the assertions as facts (and we shouldn’t), “physician heal thyself” comes to mind.

How much of those purported admin costs goes to PE and VC firms that have bought up hospitals and providers just to slap “facility fees” onto an outpatient visit? How is that improving care? How is that improving doctor work-life balance?

I agree that we pay too much to too many of the wrong people, but if we eliminate the salaries listed there, we save a whopping $59.5 million on the $3.6T identified. That’s about a point and a half of savings.

In fact it’s less than that because the big health insurance CEOs get paid about a million or two in salary and the bulk comes in equity grants from the company, which is to say that their income is based on what the market believes is the net present value of the organization. That means it doesn’t come from claims dollars, it comes from Wall Street dollars. It’s intertwined and completely dependent upon their profits in insurance and administration no doubt. But it’s not siphoning off premiums to the tune of $20 million to the CEO.

If this “doctor” is this bad at evaluating symptoms and diagnosing the most probable cause, maybe he shouldn’t be paid that much.