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U.S. Health System Has More Paper Pushers, Fewer Nurses, Study Says

January, 1996

Journal Article Shows U.S. Health Bureaucracy Skyrocketed by Close to 700% Over Past 25 Years
Proportion of Medical Workers Giving Care Has Fallen Dramatically

Over the past 25 years, the percentage of U.S. medical care workers doing mostly paperwork skyrocketed from 18.1 percent to 27.1 percent of total health employment, while the proportion of nursing and physician personnel fell from 51.4 percent to 43.7 percent, according to an article in the February issue of the American Journal of Public Health released today. The study demonstrates that between 1968 and 1993, the number of health care administrators grew by 692 percent. In contrast, over this same period, the number of doctors grew by only 77 percent and registered nurses by 164 percent. Physicians' offices added 550,000 fulltime administrative personnel, almost one per doctor, to deal with the burgeoning requirements of managed care and other complexities of our market-based system.

The study, entitled "Who Administers? Who Cares? Medical Administrative and Clinical Employment in the U.S. and Canada," was authored by Harvard doctors Steffie Woolhandler and David Himmelstein, founders of Physicians for a National Health Program, with J.P. Lewontin. The research was supported by a grant from the Robert Wood Johnson Foundation.

Dr. Woolhandler, an associate professor of medicine at Harvard, says "managed care squeezes doctors, nurses and patients but eats up most of the savings with bureaucracy. In 1993, administration accounted for 57 percent of health sector job growth and all of the growth in hospital employment." "As the proverb says, there's no use going to bed early to save candles, if the result is twins," added Dr. Woolhandler.

"Instead of the health system being primarily a patient care service, as it was several decades ago, it has rapidly become much more of a business--by far the biggest business and the number one employer in the United States," said Dr. Sidney Wolfe, director of the Public Citizen Health Research Group. "Each year, a larger and larger percentage of the more than 10 million employees in this one trillion dollar industry are business people, not health care providers," added Dr. Wolfe.

"Our nurses have less time to spend at the bedside, while health care companies make enormous profits and reward their CEOs with outrageous compensation," said Kit Costello, R.N., president of the California Nurses Association.

The study also found that the U.S. allocates far more of its health budget to paper-pushing and administration than does Canada. While total health care employment per capita is 7 percent higher in the U.S. than in Canada, all of the extra U.S. employment is due to administration. Canada actually employs more nurses per capita despite spending one third less on health care per capita. Hospitals employ more clinical staff in Canada, while nursing home staffing is strikingly better. If U.S. hospitals and outpatient facilities adopted Canada's 1986 staffing patterns, we would save more than $100 billion this year alone and employ 1,407,000 fewer health managers and clerks.

"The U.S. could vastly reduce medical costs and actually increase medical care by switching to a Canadian single payer system," said Dr.Quentin Young, National Coordinator of PNHP. "The resources saved by trimming paperwork would be sufficient to cover the 40 million uninsured Americans and improve care for many Americans with insurance as well," added Dr. Young.