Of Dirty Sheets and Worse: Administration Costs and Staffing Matters

I recently reread a distinctly memorable opinion piece for the July 1981 issue of Social Work titled "Dirty Sheets: A Multivariate Analysis." Written just as Reaganomics was launching into high gear and California's Proposition 13 had begun eroding public services, Henry Miller, a professor of social welfare at the University of California at Berkeley, commented on how "there's something real serious going on in social work today. It's no joy being a social worker in a deteriorating welfare state.... Everybody's worried about their jobs. Programs seem to be closing down all over the place, and those that are still running are hanging on for dear life". This sounds familiar, I thought. Isn't everyone today worried about keeping their jobs? Miller went on: Take this big San Francisco hospital for instance. They don't even have enough money to clean the sheets. Can you believe it? Hospitals are supposed to be clean and sterile and all that--you know, no germs. They should smell and look clean. But here is a big public hospital in the Bay Area, and the sheets are dirty. The lab is spilling over with smeared test tubes and slides--nobody even scrapes off the blood. It's enough to make you cry--or laugh--or something. It's crazy! This isn't Calcutta. It's San Francisco and it's 1981. There's no money to mop up the puke in the hospital, and everybody's crabbing about how much taxes they have to pay. It doesn't make sense anymore. Miller complained that the plethora of problems confronting urban society were escalating beyond control and, worse, that neither his social work students nor the profession seemed to care. He'd been told not to worry, that "social work always does well in bad times. The worse things get...the better off the profession is". Therefore, Miller reasoned, it was time for the social workers. However, according to Miller, "They've changed things around this time. We're not the cure anymore--we're the disease". He spelled out the new "cure": "They've called in the accountants and the scientists this time around. No more of that soft social work stuff". Accountants and scientists would ask the worthwhile questions, the hard questions, like "How much does it cost? Does it work? Can you measure it?". Was Miller prescient? He was on to something, for in the 1980s the accountants and bean counters did take over health care. A recent study in the New England Journal of Medicine reported that in 1990 nearly one of every 10 health care dollars paid for hospital administration. Of the nation's $666.2 billion health care bill, $256 billion was spent on hospital care, and a whopping $63 billion of that--one-quarter--went for administration (Woolhandler, Himmelstein, & Lewontin, 1993). Administration means paper pushers, accountants, clerks, analysts, and executives, period. Not surgeons; not occupational therapists, physical therapists, radiology technicians, or nurses; not social workers; not even environmental technicians--nobody who treats patients. Administration means support costs, the clerks through the chief executive officers--people whose client is the hospital, not the patient. In 1968, there were 435,100 managers and clerks for 1,378,000 patients, a ratio of about one to three. But 22 years later (after 18 years of Republican stewardship) hospitals were up to 1,221,600 administrators, while the average daily patient census had declined to 853,000. That's more than 1.4 administrators per patient, almost a tripling in the number of hospital administrators in a little more than two decades. One of every 10 health care dollars, and one of every four dollars of hospital revenue, is spent largely on the record keeping required to track billings required to do battle with competing hospitals over market share and with insurance companies over payments. Even states that have implemented hospital payment reforms that incorporate elements of managed competition show no lower levels of administrative costs (Woolhandler et al. …