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Point of View: The High Cost of Hospital Bureaucracy by Michele Jerrell, Publisher

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Categories: Practice Management, HR and Accounting;
Point of View: The High Cost of Hospital Bureaucracy

by Michele Jerrell, Publisher of Dentaltown magazine
Point of view is an editorial space for original opinions, reflections, and thought-provoking commentary on trends shaping the profession.
When Trilliant Health released an analysis showing that hospitals now spend nearly twice as much on administration as on direct patient care, the findings spread quickly through health care circles and onto the Dentaltown message boards.

Dr. Howard Farran posted the link, prompting an outpouring of frustration and reflection from dentists who see striking parallels between hospital administrative bloat and the creeping red tape in private practice.

According to the report, U.S. hospitals logged approximately $687 billion in administrative expenditures in 2023, compared with $346 billion in direct patient care spending, a nearly 2-to-1 ratio. Administrative costs grew 87% from 2011 to 2023, outpacing clinical spending growth, raising the question: At what point does the cost of managing health care outweigh the cost of delivering it?

One Townie argued that doctors are often unfairly blamed for rising health care costs, even though the real growth is occurring elsewhere. “My brother-in-law is a hospital administrator who makes what an MD makes but works 9 to 5, has no liability, no nights or weekends, and works from home,” he wrote. “The problem is you have less money going to the people delivering care than to the people counting the beans.”

Another dentist chimed in with firsthand examples from his own hospital system: “The hospital I work in just bought and refurbished a seven-story building solely for administration. They’ve added three levels of management between me and the CEO in the last decade. The CEO, an accountant with a corporate insurance background, makes four times more than the highest-paid MD.”

Across the thread, many echoed that sentiment: that increasing bureaucracy and executive overhead have tilted health care’s priorities away from patient outcomes and toward institutional optics.

Others acknowledged that the complexity of modern health care may make some administrative burden inevitable. One member, whose wife works in medical research administration and whose brother is a hospital podiatrist, painted a picture of how fragmented care delivery has become: “It’s not uncommon for a single surgery to involve four or five different employers; the surgeon, anesthesiologist, lab, and hospital all work under different contracts. Hospitals handle the billing and collection burden for all of them. It’s a byzantine and difficult process, and it isn’t getting any easier.”

That labyrinth of payers, regulations, and legal obligations forces hospitals to build layers of staff to stay compliant, an irony not lost on clinicians watching the system drown in its own paperwork.

A Townie working in public health summed it up succinctly: “There’s so much bureaucracy, codes to comply with, rules, regulations, standard operating procedures, you end up with incredible administrative burden. They never take anything away; they just add more and more stuff.”

From safety protocols to insurance audits to digital documentation, new mandates pile up each year without eliminating older ones. The cumulative effect is a health care environment where compliance often feels more important than care.

Even as posters debated whether administrative growth is necessary or excessive, they shared a common frustration: the emotional toll on providers. “The only group that has to deal with accountability, even when it’s complete nonsense, is the clinicians,” one Townie wrote. “I’d tell my kids to go into administration long before I’d recommend being a hospital provider.”

While some see these costs as the unavoidable price of complexity, others view them as symptoms of a system that has lost its way, where the people who treat patients shoulder the stress while those managing spreadsheets collect the rewards.

Though the discussion focused on hospitals, there is a clear reflection to dentistry. Rising compliance costs, insurance paperwork, and corporate consolidation have steadily increased the administrative share of private practice budgets, even as reimbursement pressures mount.

Whether in a hospital or a dental office, the paperwork and compliance layers keep growing while the time for patients keeps shrinking. It’s a reality that transcends specialties: The more systems built to “streamline” care, the less streamlined it often feels to those delivering it.

Hospitals may lead the headlines, but the same pressures are creeping into every corner of health care. Each new layer of oversight, compliance, and corporate management takes a little more time and money away from the people actually delivering care. Dentistry isn’t immune, and the profession will need to stay vigilant to avoid becoming just another system bogged down by bureaucracy.

Is administrative bloat threatening care quality in your practice, or is it a necessary safeguard in a complex system? Join the ongoing discussion at Dentaltown.com and share your point of view. 

Join the Conversation!

Written by Michele Jerrell with the assistance of AI, and reviewed by the Dentaltown editorial team. Views expressed do not necessarily represent those of Dentaltown or Farran Media.
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