One Chart Explains It
Never forget: The medical industry is Big Business.
Behind every doctor is an administrator… someone whose job it is to go to meetings… type in billing codes… or “adjust” insurance claims.
In the past 50 years, “overhead costs” as a share of health care spending have exploded…
Today, these overhead administrative costs make up more than 25% of all U.S. hospital expenditures. According to a study published in health care policy journal Health Affairs, $1 out of every $4 that you spend when you go to a hospital goes to bureaucracy instead of patient care.
Not so long ago, one top manager ran a hospital. Usually, a good one.
Today, more C-level executives join the CEO… for compliance, information technology, quality management, finance, operations, and more. And each of these “chief officers” has to have his own echelon of administrator underlings and mid-level managers.
This chart measures the relative growth in the salaries of physicians and health care administrators from 1970 to 2009. It’s incredible…
These administrators aren’t necessarily the most qualified… But a 2014 analysis by the New York Times shows that they are the most-paid…
The base pay of insurance executives, hospital executives, and even hospital administrators often far outstrips doctors’ salaries, according to an analysis performed for the New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital CEO and $237,000 for a hospital administrator, compared with $306,000 for a surgeon and $185,000 for a general doctor.
All these salaries for administrators add up.
And the pricey administrative spending doesn’t stop at hospitals…
According to a study by the Commonwealth Fund, a health care policy organization, American insurers spend more than $600 per person on administrative costs, more than twice as much as in any other developed country.
Next time you get a doctor’s bill, ask how much you’re paying for someone to “administrate” your care. This spending is often government-led busywork – it means meetings… coffee-cup carriers… and paper pushers.
Many of these administrators have no clinical experience. But they’re increasingly “in charge” of dictating how, when, and where physicians and health care providers work.
And none of it helps you reach your goal: to get well.
Next time you get a doctor’s bill, ask how much you’re paying for someone to “administrate” your care.
The major problem with these business-focused administrators taking over medicine is that no one is measuring the outcomes of the care delivered. And they won’t, either, because of the clear conflict of interest. For-profit hospitals are in business to make money, not to worry about good care. And that’s leading to exploding prices… and worsening care.
Do what I do…
Avoid hospitals and doctors as much as you possibly can.
I’m against annual doctor’s visits for healthy people. No scientific evidence shows “annual physicals” do anything other than fill the pockets of doctors. And doctors are much too quick to prescribe pills to fix whatever ails you.
Get benefits from whole foods, not supplements.
I like the Mediterranean diet, which consists of plenty of fish, fruits, vegetables, whole grains, and olive oil. And avoid the “white killers” – white flour, sugar, and white rice – instead, switch to the whole grain versions.
Quit sabotaging your sleep.
Sleep is the best way to improve your health. It restores your immune system and allows your brain to clear out debris. A few tips to get good-quality sleep include keeping your bedroom dark, cool, and free from screens like a tablet or cellphone. Also, make a schedule and stick to it.
Take time to meditate.
I call meditation the “Easiest Exercise in the World.” It only takes 12 minutes a day, and you can do it in bed. People who meditate have lower blood pressure, decreased risk of heart disease, better oxygen uptake – and report feeling less stressed.
Get up and move.
Even if it’s only a few minutes a day walking around your neighborhood… walking can boost your immunity (which means you’ll get sick less), improve your mood, reduce stress, and improve your cardiovascular health. I like to get up several times a day to take short walks, and often spend time reading and walking on the treadmill in our office.
If you’re interested in more simple ways to improve your health and wealth this year, I publish a daily e-mail called Health & Wealth Bulletin. It’s filled with tips, tricks, secrets and strategies that can save you money… save you time… or even save your life. Click here to learn more and sign up.
Dr. David Eifrig worked in arbitrage and trading groups with major Wall Street investment banks, including Goldman Sachs, Chase Manhattan, and Yamaichi in Japan. In 1995, Dr. Eifrig retired from Wall Street, went to UNC-Chapel Hill medical school, and became an ophthalmologist.
Today, he publishes a 100% free daily letter on both health and wealth that shows readers how to live a millionaire lifestyle for far, far less. Click here to learn more.