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How Many Lives is Excess Administration Costing Us?

How much healthcare are we sacrificing in the name of administration? It's hard to get a handle on it because it's so complex and there's so many pieces. Let's try to put it into perspective.

Number of Administrators

One comparison that is frequently made relates to the number of healthcare administrators. This article by BC Green Party leader Sonia Furstenau discusses the imbalance. It includes a striking comparison between Canada and Germany.

Adjusting for population, we have more than 10 times the number of healthcare administrators.

Expenditures by Province

You may have seen this data, based on statistics from CIHI, which compares administrative expenditures on healthcare by province.

We spend $290 million on administration per year. This is the highest among the large provinces, and nearly double Alberta (factoring in population). So if we were as efficient, we could save $132 million.

But we're just getting started.

Health Authorities

Those numbers only count cost for central administration of the health system. That includes things like running the Ministry of Health, managing MSP, and other things that have an effect province wide. Still, that's only a small fraction (a bit over 1%) of the overall health budget.

What's the largest? Payments to individual doctors, to fund them, their staffs, and clinic expenses? Nope, that's a distant second, a bit over 20% of the health budget.

The largest is "regional services" which is a bit over 70% of the overall health budget. That goes to health authorities to run hospitals, long-term care, etc.

This shows the breakdown of operating expenditures within each of the five main health authorities.

While we don't have detailed breakdowns available, the "corporate" category would seem to be pretty much pure administration. That's $1.3 billion on central administration in health authorities (about 7%) of their budget.

Again, let's compare that to Alberta, where administrative expenditures from their single health authority, AHS, totalled $494 million. Again, adjusting for population, that's about 2.2x more. Again, BC spends more than double AB on administration in health authorities.

If our health authority administration were as efficient, we'd save $719 million per year there alone.

Is That It?

No, of course not. Look at all those other line items: acute (hospital), community, LTC, MHSU, etc.

If you don't think there isn't large amounts of additional administration spending in each of those, you're kidding yourself.

We don't have numbers readily available for each of those, but let's stop there for now anyway.

For That Money...

So, let's assume that our central and health authority administration expenditures were as efficient in BC as they are in Alberta, again, factoring in the population differences.

That would save $851 million per year.

Let's see how that could help with the family doctor crisis. We'll go with the old numbers of about 6800 family doctors in BC, about half of which do traditional longitudinal family practice, providing ongoing care for a panel of patients. (It's far less now, with all the clinic closures, doctors who have gone to work for Telus Health, etc.).

From those savings, we could spend an additional $250 thousand for every family doctor providing longitudinal care in BC, every single year.

Which, I should add, is more than many of them bill in total now, and when you factor in expenses, staff, etc. is far more than the vast majority of them take home, before paying taxes, etc.

How many lives would be saved, how much suffering would be prevented, if family doctors could afford to provide the quality, effective care they could be?

So tell me again how we need more money from Ottawa to make changes in the system.

What Will It Take?

Anyone reading through this or some of the other topics that have been discussed recently who still thinks government intends to fulfill what some think of as recent “promises” to family physicians without being dragged kicking and screaming into it needs to give their head a shake. It would be a complete 180.

Ditto anyone who thinks govt cares about saving lives, good care, or spending money well. Does anyone believe that those values have been what’s driving our health system? It’s never about efficiency or clinical care. Power, control. Like always. The rest is secondary.

If you want change, arguments that it will help people or that doctors need more won’t cut it.

You’re trying to convince people who’d need to give up massive power and control if that happens.

That completely goes against their self-interest.

For them to even consider making changes, the direct consequences for decision makers of doing nothing have to be far worse.

Over $800 million in excess spending on administration per year (and that's just the tip of the iceberg).

More than enough to properly fund primary care so everyone can have a family doctor (the doctors are here and ready to provide this care, but can't afford to now).

If this doesn't justify severe consequences for decision makers, what will?