Chris is joined by John Chamberlain, chairman of the board of Citizen Health and a reformed former hospital executive. They dive into the explosive growth of administrators and bureaucrats relative to the increase in people responsible for caring for us. They also discuss what needs to change to lower healthcare costs.
Comments (2)
  1. Thank you John for the pixie dust and candy cane free insights into the world of hospital administration. I have just reduced anything not related to the direct delivery of healthcare to “overhead”. It is just easier. It seems like as long as those in “overhead” touch the money first, they can decide what happens to it and how much trickles down to “labor”. It seems that there is no motivation to lower costs when these are being used to justify salaries for extra people or more “Chiefs”. How can we physicians find out how much overhead per physician a system has before even approaching it for employment? Will they tell us if we ask?

    • Nirav, thanks for reaching out and I appreciate your nice comments about the podcast.

      Sorry for the delay in responding, I just got this inquiry about a week or so ago.

      I agree with you 100% on your thoughts re overhead. It starts at the point where service( both physician and hospital) revenue is taken in. From that point forward, the executives from both finance and operations make the decisions as to how that revenue flows.

      Also, the same people decode how cost/overhead is allocated. There are standard formulas for that overhead allocation, but it varies from hospital to hospital.

      As most hospitals charge a “management fee” to the physician practices they own, it’s typical for them to throw everything imaginable into that overhead allocation and it’s also typical for them not to divulge what that is.

      I’m not sure they would answer that question. They would probably just say, here’s your base salary and additional compensation potential. Are you good with that?

      I think it’s valid would still ask the question. The worst you could hear would be No.

      If you’re a primary care physician or a non-hospital based specialist, have you thought about a direct pay practice?

      Please let me hear back from you.

      Thanks, John

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