• Join Me On a Dive Down the Rabbit Hole of Health Care Admin Costs

    I went down a rabbit hole last night, so today I’m going to torture you by telling you all about it. It started on Twitter, where I learned that various versions of the chart below are extremely widespread:

    Two things immediately struck me. First, the number of administrators suddenly skyrocketed between 1993-96. I can’t think of any good reason for this. Second, it shows the number of physicians growing by only 150 percent, and I know that’s not right. In reality the number has more than tripled. So that got me curious: where did this chart come from?

    The number of physicians is pretty easy to get. Right now there are a little more than 1 million physicians and surgeons in the US. It’s also pretty easy to get numbers for the entire health care sector: about 16 million. The hard part is figuring out how many administrators there are. Of the sources cited in the chart, neither the BLS nor the NCHS is going to help with this, so I went searching for Himmelstein and Woolhandler. They are prolific writers, but the closest I found to this chart was this one that goes up to 1987:

    This matches the original chart through 1987, though it’s worth noting that H&W are forced to make a lot of assumptions to get here.¹ The reason is simple: there is no remotely reliable measure of the number of health care administrators in America. In fact, I can’t figure out where H&W got theirs. It’s allegedly sourced to the 1989 Statistical Abstract of the United States, but I sure can’t find it there and I have no reason to think the federal government has ever tracked this. But let’s plow ahead anyway.

    In 2003, H&W estimated that per capita health care administration costs (not personnel) had increased from $450 in 1987 to $1059 by 1999—and this is a very broad number since they include things like the time doctors spend on admin chores. Adjusted for inflation and population growth, that’s an increase of about 80 percent. But the chart that kicked off this post shows an increase of around 4x during that period. The H&W number is far more believable. I suspect that the 4x increase is an artifact of some kind, perhaps due to a reclassification of job functions. Or maybe it was just a mistake. In any case, it’s been carried over in every chart since.

    This takes us to 1999. But what about now? Here’s a page from the Bureau of Labor Statistics for 2018:

    Everyone here is a practitioner or a medical assistant, not an administrator. It adds up to 13 million. With a total of 16 million people in health care, that leaves 3 million unaccounted for. Those are the administrators, receptionists, billing clerks, etc. Insurance adjusters and other outsiders add about 2 million to the total, all of them administration, which gets us to roughly 5 million administrators out of 18 million total, or 28 percent. H&W estimated that administration and clerical workers made up 27 percent of the health care labor force in 1999, increasing at a rate that would get us to 30 percent by today. So the right number is probably between 28-30 percent. Let’s call it 29 percent.

    Put that all together and it suggests that the number of administrators has increased about 30-40 percent since 1999.

    So what should our chart really look like? I have three different suggestions. The first just puts together the data points that I’ve outlined so far:

    The second comes from the federal government, and it’s their estimate of government admin costs plus private insurance admin costs. This does not include hospital billing clerks, IT departments, and so forth, but it still ought to provide us with a benchmark of sorts for the growth rate of administration:

    Finally, here’s a chart based directly on figures from Himmelstein and Woolhandler (Table 2 here):

    This is nowhere near the 3000 percent growth on the original chart, but it’s still pretty high. It’s probably safe to say that health care administration has grown somewhere on the order of 1000 percent over the past 50 years. But why?

    This is what brings us to the final, most correct chart. Here’s the thing: fifty years ago we didn’t have MRI techs or transplant hospitals or routine ultrasounds or proton beams for cancer patients. Four years ago I spent a couple of weeks at City of Hope to treat my cancer; the treatment I got—not to mention the entire campus in its current form—didn’t even exist in 1970.

    In other words, the main reason that administration has gotten bigger is because medical care has gotten bigger. Since 1970, adjusted for inflation, health care spending has gone up about 600 percent and the number of health care workers has gone up about 500 percent. It’s only natural that the number of administrators would go up at least that much as well.

    So the real question is: how much has administration gone up above and beyond the overall growth in health care? Here’s the answer based on two of the estimates above:

    Once you take into account the growth in health care generally, the share devoted to administration has gone up by 50-100 percent. That’s a lot! But it’s also not that surprising. In 1970, the health care industry spent approximately $0 on IT management. Today they spend a bundle, and all of that is admin overhead. Purchasing has exploded too, since there are far more things to purchase these days. Regulations have grown along with technology, so compliance offices have grown. Doctors and hospitals have always spent hours on the phone arguing with insurance companies, but that’s probably grown too.

    I don’t mean for any of this to excuse the growth rate of administration, which might be higher than it should be. And there’s certainly no question that our absolute level of administrative overhead is insanely high. H&W estimate, for example, that the share of workers dedicated to administration is about a third higher in the US than in Canada. Needless to say, this is largely because Canada doesn’t waste boatloads of money on private insurance and all the overhead that implies.

    Bottom line: the health care system has grown tremendously over the past 50 years, but that’s mostly not because we have a lot more doctors. It’s because we have MRI techs and ultrasound specialists and more kinds of nurses and more kinds of pills and enormous proton beams to cure cancer. (Those proton beams are massively expensive and require large staffs, but that doesn’t mean you need any more oncologists per patient.) To manage all this new stuff, we need bigger admin and support staffs. As a result, admin and support have grown about 50-100 percent on a relative basis. That’s the real number.

    ¹Note that their estimate include a huge jump between 1984-87. However, this makes some sense since the Reagan administration changed the Medicare payment system in 1983 in a way that might plausibly have led to a big increase in administration costs.

  • America Is Targeting the Russian Electric Grid — But Don’t Tell the President

    Sergei Savostyanov/TASS via ZUMA

    The New York Times reports that we have been aggressively installing malware in Russia’s electric grid:

    Since at least 2012, current and former officials say, the United States has put reconnaissance probes into the control systems of the Russian electric grid. But now the American strategy has shifted more toward offense, officials say, with the placement of potentially crippling malware inside the Russian system at a depth and with an aggressiveness that had never been tried before. It is intended partly as a warning, and partly to be poised to conduct cyberstrikes if a major conflict broke out between Washington and Moscow.

    ….Officials at the National Security Council also declined to comment but said they had no national security concerns about the details of The New York Times’s reporting about the targeting of the Russian grid, perhaps an indication that some of the intrusions were intended to be noticed by the Russians.

    This was obviously an “official leak.” But why? To make sure that Russia knows how vulnerable they are? Or to send Russia into a tizzy looking for malware? Hard to say. But here’s the best part of the story:

    Pentagon and intelligence officials described broad hesitation to go into detail with Mr. Trump about operations against Russia for concern over his reaction — and the possibility that he might countermand it or discuss it with foreign officials, as he did in 2017 when he mentioned a sensitive operation in Syria to the Russian foreign minister.

    I appreciate the sentiment here, but it makes no sense. If the intelligence community is willing to talk to the Times, they obviously aren’t concerned about Trump’s blabbing. Nor are they concerned about the fact that he might cancel the operation if he learns about it, since he’ll obviously learn about it once Fox & Friends discusses the Times piece.

    My amateur guess is a little different: this is really a way of making sure the American public knows about the cyberwar program. Trump could still stop it, but he now knows that his cancellation would be leaked and he’d look like a Putin stooge—not something he can afford more of right now. This is not a subtle form of bureaucratic battle, it’s hardball of the most explicit kind. The intelligence community—including Trump’s own NSC—pretty obviously wants to make sure there’s no chance of Trump not getting the message.

  • I Got Yer Exploding Bullets Right Here

    Here is Kevin Williamson over at National Review:

    I Was Promised Exploding Bullets!

    You know, Charlie, I have been looking all over for some of those “exploding bullets” I keep reading about, but I am unable to find any for sale. The reason for that is that — cool as “exploding bullets” sounds! — they do not really quite exist.

    (This would not come as news to people who understand how bullets work, but never mind that.)

    The “exploding bullets” thing is an eternal myth, spread by, among other sources, shoddy public-radio journalism (shout out to KERA in Dallas!). Firearms are, for some strange reason, a subject to which America’s editors are all too content — proud, even — to assign reporters who are utterly ignorant.

    The Washington Post published Adam Weinstein’s hilarious defense of this ignorance under the headline “The NRA and its allies use jargon to bully gun-control supporters.”

    This is a very peculiar post. First off, it links to an earlier post about a report on KERA that “contained a preposterous invention: Chicago’s criminals, the report said, covet something called ‘R.I.P.’ bullets, which are, in the report’s words, ‘designed to explode inside the body.’ ” But this is not at all preposterous. For starters, teenage gangbangers probably believe lots of stuff. So what? And in this case, the R.I.P bullet does indeed exist and it took me only 10 seconds to find it: it’s the “Radically Invasive Projectile” from G2 Research, a bullet with eight copper petals that separate upon impact. Or, in vernacular, it explodes into nine separate pieces when it hits you.

    Then Williamson goes after Adam Weinstein for his “hilarious defense of this ignorance.” But Weinstein’s piece, which ran over a year ago, says nothing about exploding bullets. It’s about the way gun folks try to pretend you can’t have an opinion about gun control if you don’t know what AR stands for¹ or get confused about the difference between a magazine and a clip.² Or the difference between automatic and semi-automatic.³

    I dunno. It’s a slow day over at National Review, I guess.

    ¹You don’t really need to know this, but the answer is Armalite, the name of the original manufacturer of the AR-15.

    ²You don’t need to know this either, but the answer for most of the guns you see on TV is “magazine.”

    ³This you actually should know:

    • Automatic: you pull the trigger and a hail of bullets flies out of the muzzle as long as you keep pressure on the trigger. This is what you see in war movies or on TV shows about drug lords. It’s illegal for a civilian to own an automatic rifle manufactured after 1986. Ownership of pre-1986 automatic rifles is legal but very rare. They’re quite expensive and require an extensive application process to register with the ATF.
    • Machine gun: another name for an automatic rifle.
    • Submachine gun: This is the gun you associate with Al Capone. It’s an automatic that’s nearly the size of a machine gun but uses smaller handgun rounds.
    • Semi-automatic: you pull the trigger and a single bullet is fired. Pull it again, and another bullet is fired. You have to pull the trigger for every round you fire.
    • Manual load: a gun that requires you to manually load a new round after every shot. Virtually all rifles prior to the 20th century required manual loading: flintlocks (think Revolutionary War), lever action rifles (think old-time Westerns), pump-action rifles (think skeet shooting), bolt-action rifles (think deer hunting), and so forth.

    In real life, nearly all rifles you’re likely to see are semi-automatics or manual loads, and all handguns are either semi-automatics or revolvers.

  • Chart of the Day: Corporate Profits Are Up, Corporate Taxes Are Down

    Politico reports on the impact of the Republican tax cut:

    Federal tax payments by big businesses are falling much faster than anticipated in the wake of Republicans’ tax cuts, providing ammunition to Democrats who are calling for corporate tax increases. The U.S. Treasury saw a 31 percent drop in corporate tax revenues last year, almost twice the decline official budget forecasters had predicted. Receipts were projected to rebound sharply this year, but so far they’ve only continued to fall, down by almost 9 percent or $11 billion.

    This practically begs for a chart, doesn’t it? I’m here to help. The chart below shows corporate profits before and after the Republican tax cut, compared to corporate tax receipts (through May) before and after the tax cut. As you can see, President Trump signed the tax cut into law on December 22, 2017, and it was a very merry Christmas indeed for his big business pals.

    Profits are up, taxes are down. And why are corporate taxes down? Because Republicans lowered their tax rate. Duh. You’d think that after 40 years there wouldn’t be anyone left in America who still believes that lowering tax rates will increase tax revenue. But the Republican Party seems to have an endless supply of marks for its con game on behalf of the rich.

  • Here’s the Harriet Tubman $20 Bill That Trump Killed

    Via the New York Times, here is an early prototype of the Harriet Tubman version of the $20 bill:

    Apparently the Times has good sources within the Bureau of Engraving! They report that this design was completed back in 2016:

    The development of the note did not stop there. A current employee of the bureau, who asked not to be named because of the sensitivity of the matter, personally viewed a metal engraving plate and a digital image of a Tubman $20 bill while it was being reviewed by engravers and Secret Service officials as recently as May 2018. This person said that the design appeared to be far along in the process.

    It’s worth noting that the Tubman bill was never intended to go into circulation anytime soon. Probably not until 2030, or the late 2020s at best. When Treasury Secretary Steve Mnuchin delayed the bill, the only thing he delayed was the unveiling of the design next year, in time for the 100th anniversary of the 19th Amendment. He was apparently afraid that a mere public unveiling of the bill would send Donald Trump into a tizzy that might embarrass everyone. It’s like having a five-year-old for president.

  • America Needs a Lot More Labor Unions

    Unionize! You have nothing to gain but your bosses’ obscene rents!

    The lack of interest in tech-sector unionizing is indeed a bit of a puzzle. There are gargantuan piles of money floating around in the Apple/Google/Facebook space, and workers could easily get a bigger share of it by unionizing. And yet they don’t. It’s very odd.

    Now, this is not my biggest concern in the world. Most tech workers make plenty of money already, which is probably why it’s hard to get them interested in unionizing. It’s the ill-paid service workers in America that really need to unionize. Still, why shouldn’t tech workers get themselves a bigger share of the pie?

    It’s weird. There are lots of lefty policy proposals that are inherently risky. What would happen if we broke up Facebook? We don’t know, really. What would happen if we implemented a huge carbon tax? It’s hard to say. We can study these things and come up with educated guesses, but that’s all.

    But then there are the things where we know the answer. Universal health care? We already do it for the elderly, and dozens of other countries do it for everyone. It works fine. Unionizing? The US was heavily unionized in the 50s and 60s and it worked fine. High marginal tax rates on the rich? We’ve done that too, and so have other countries. Up to a point, it works fine.

    And then there are the things that we know don’t work. Military intervention in other countries? That’s got a very poor track record. Pumping teratonnes of carbon into the atmosphere? Bad idea. Economic warfare via tariffs? It’s been over a century since that was even arguably a good idea.

    And yet we keep resisting all the good stuff and continuing with the bad stuff. What the hell is wrong with us?

  • Trump: “Of Course” You Report Foreign Campaign Dirt

    Fox News

    The inevitable Phase 2 of Foreigndirtgate took place this morning:

    Under fire for saying earlier in the week that “I’d take it” and scoffing at the notion that he should call authorities, Mr. Trump shifted by saying that while he would still look at incriminating information provided by a hostile foreign power about an election opponent he would “absolutely” report such an encounter. “Of course, you give it to the F.B.I. or report it to the attorney general or somebody like that,” Mr. Trump said on “Fox & Friends” in a telephone interview on Friday morning. “But of course you do that. You couldn’t have that happen with our country.”

    If this follows the usual pattern, Phase 3 will happen in about a week. That’s the part where Trump, counting on the fact that memories have gotten a little foggy, claims that he’s always said he’d call the FBI if some foreigner offered him campaign dirt. His spear carriers in Congress and the media will all join in, agreeing that the liberal media, as usual, is deliberately impugning Trump’s integrity by misquoting him.

  • Yeah, Trump Was Talking About Dirt From Foreign Governments

    I guess I might as well fess up to being wrong and be done with it. Here is our president complaining about all those people who think he shouldn’t accept campaign dirt from foreigners:

    I meet and talk to “foreign governments” every day. I just met with the Queen of England (U.K.), the Prince of Wales, the P.M. of the United Kingdom, the P.M. of Ireland, the President of France and the President of Poland. We talked about “Everything!” Should I immediately…call the FBI about these calls and meetings? How ridiculous! I would never be trusted again. With that being said, my full answer is rarely played by the Fake News Media. They purposely leave out the part that matters.

    In Trump’s interview yesterday with George Stephanopoulos, neither man explicitly mentioned getting oppo from foreign “governments.” I figured this was negligent on Stephanopoulos’s part and deliberate on Trump’s part, but obviously that’s not the case. In today’s tweet, Trump specifically said he thought it was just fine for him to talk to “foreign governments.” Since the context is campaign oppo, he’s saying that it’s OK for a presidential candidate to accept scuttlebutt from an agent of a foreign government.

    I didn’t think that even Trump would admit to that, but as usual, it turns out that he’s even worse than I ever thought.

    UPDATE: For fuck’s sake:

    President Trump’s 2020 reelection campaign will handle damaging information on political opponents provided by foreign governments and entities on a “case by case basis,” according to the campaign’s top spokesperson.

    Asked about Mr. Trump’s assertion that he would be receptive to dirt on rivals offered by foreigners, Kayleigh McEnany, the national press secretary for the president’s reelection bid, told CBSN’s “Red & Blue” that campaign staff should take the president’s comments as a “directive” to handle foreign dirt through a two-pronged approach. “The president’s directive, as he said, [it’s] a case by case basis. He said he would likely do both: Listen to what they have to say, but also report it to the FBI,” McEnany said.

    They are really intent on digging themselves an ever deeper hole on this. I guess that’s what happens when you’re constitutionally incapable of ever admitting that you’re wrong.

  • Trump Jr. Sells Beverly Hills Home at a Rich Premium

    Google Street View

    TrumpCo has sold a home in Beverly Hills:

    A deed registered with L.A. County on May 31 shows that Trump’s eldest son, Donald Trump Jr., signed the property over to Hillcrest Asia Ltd., a company registered in the British Virgin Islands. The price tag: $13.5…. Trump bought the property, at 809 North Canon Drive, for $7 million in 2007, according to L.A. County land records. The county assessed the property last year at $8.3 million.

    Hmmm. Luxury homes have been very hot in Los Angeles over the past few years, but the Beverly Hills market softened considerably last year and prices dropped. A home like this one should probably sell in the neighborhood of $10-11 million. So why did this Indonesian guy pay $13.5 million? We can guess, but I suspect we will never know.