How much administration does health care really need?

During my residency in family medicine, one of the faculty was tasked with the challenge of teaching all of us the “practice management” curriculum, trying earnestly to make us understand how much of our time and energy in clinical practice would be consumed by administrative tasks. Even then, it struck me as borderline crazy how non-procedural physicians are paid. At the time I graduated from residency (2004) and for many years afterward, the financial value of an outpatient “evaluation and management” (E/M) visit was determined not only by the complexity, acuity, and number of medical issues addressed, but also by the number of body “systems” discussed and physically examined. Why the latter should have any relationship to how much money a patient and/or her health insurance company pays for an office visit was, and remains, beyond my comprehension.

My colleague and fellow family physician Dr. Ranit Mishori has written for Medscape about why she and many other clinicians have come to hate the review of systems (ROS). Like many others over many years, she pointed out that a comprehensive (rather than focused on the chief complaint or condition being treated) ROS was usually useless and often led to bloated documentation. Nonetheless, each health care organization I’ve worked for over the years has employed a small army of people whose job it is to make sure that physicians include the ROS and enough physical examination elements to justify coding a higher-level (i.e., higher charge) visit, and to let us know if we’re not doing it right.

Last year, the Centers for Medicare & Medicaid Services (CMS) finally simplified their guidelines for E/M visit codes, essentially eliminating the requirement to document more information than clinically useful about the history of present illness, ROS, and physical examination. In FPM, the American Academy of Family Physicians’ practice management journal (on whose editorial board I served from 2010-2014), this change was celebrated with articles with titles such as “Outpatient E/M Coding Simplified” and “A Step-by-Step Time-Saving Approach to Coding Office Visits.” That a series of several articles was required to explain the simplified guidelines to physicians and common situations such as “Combining A Wellness Visit with a Problem-Oriented Visit” means that practice management curricula aren’t going away any time soon, even though the physician who taught me has gone on to a well-deserved retirement. For while some administrative burdens have been lessened, others have been increased, as payment incentives for providing high quality of care require physicians to document other things, such as the reason my 70 year-old patient with end-stage renal disease on dialysis and chronic heart failure doesn’t need to have any more screening mammograms. More primary care practices are using medical scribes, in-person or virtual, to document office visits. While that’s good to prevent burnout, it remains faintly ridiculous that armies of such people are being employed for a task that adds little actual value to the heath care encounter.

Is there really too much administration in health care? From an objective viewpoint, the answer is absolutely yes, as a recent JAMA commentary observed:

A typical US services industry (for example, legal services, education, and securities and commodities) has approximately 0.85 administrative workers for each person in a specialized role (lawyers, teachers, and financial agents). In US health care, however, there are twice as many administrative staff as physicians and nurses [emphasis mine], with an estimated 5.4 million administrative employees in 2017, including more than 1 million who have been added since 2001.

The commentary went on to discuss the findings of a new report┬áthat concluded, amazingly, that “an estimated $265 billion, or approximately 28% of annual administrative spending, could be saved without compromising quality or access by implementing about 30 interventions that could be carried out in the next 3 years.” This without any major structural changes in the U.S. health care system – no need to transition to “Medicare for All” or a single-payer model (though either could lead to even greater efficiencies and savings). Companion commentaries explained why U.S. health care administrative expenses are so high (efforts to control care utilization and prices through market-based forces give rise to activities that require the hiring of more administrators) and how administrative simplification can be economically incentivized (because, apparently, wasting $265 billion per year on unnecessary administration isn’t incentive enough).

Achieving this logical next step in administrative simplification will, of course, be an uphill battle. To paraphrase Dr. Don Berwick, what some call health care “waste,” others call “income.”┬áThe same certainly goes for those armies of people looking over my E/M coding, the armies of scribes, and the armies of quality of care managers and utilization and cost controllers. The armies of people working in health care today who facilitate transactions and documentation instead of improving the patient’s care experience and health outcomes.

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