Who benefits from increasing healthcare costs?

Maureen Walsh, the Washington state Republican who thinks nurses are lazy and don’t deserve humane working conditions, got another royal smackdown from a nurse. Maybe there’s a reason nurses are overworked.

Hospital administrators pull down enormous bonuses- and most are not required to be disclosed to the public. Nonclinical healthcare wages- as in hospital administrators- increased 30% over the last decade to $865 billion (Bryant, 2018). Furthermore, salaries for nonprofit CEOs far eclipsed those for nurses. Over the past decade, salaries for hospital CEOs jumped a whopping 93% (Clinical Orthopedics and Related Research 2018). Average salaries for hospital CEOs skyrocketed from $1.6 million in 2005 to $3.1 million in 2015. In fact, salaries for nonclinical workers are a major factor in skyrocketing national healthcare spending. In 2017, 84 of the largest nonprofit hospital systems boasted total annual profits of $14.4 billion — resulting in a 2.7% operating profit margin (Bryant, 2018). Are you telling me that hospitals can’t afford to hire enough staff to allow nurses to get legally mandated breaks? Please, Senator Walsh, show me that math. Sounds like you’re being played by the lobbyists and that you’ve been too lazy to do your own research. Shame on you.

I do have to wonder what those CEOs are doing to earn $3 million salaries. Do they actually work 50 times harder than I, or one of their nurses, do?

I suspect the CEOs are in turn only a small part of the problem. I wonder how much of the money flowing into hospitals is sucked away by insurance companies?


  1. says

    ” I wonder how much of the money flowing into hospitals is sucked away by insurance companies?” Not sure what you mean by this. Insurance companies pay hospitals, not the other way around. However, there is a cost to hospitals for billing multiple payers. Actually a lot of that consists of gaming (“upcoding”) to maximize billings, in other words suck money out of insurance companies. A single payer system would reduce administrative costs, among other benefits.

  2. starfleetdude says

    Insurers generally aren’t the villain they’re made out to be , but they’re the easiest one to complain about. Medical billing is indeed complicated, but that’s on the hospitals. My own HMO (Health Partners) is a non-profit and not typical of the industry, but they do try hard to keep health care costs down and aren’t sucking money away.

  3. drew says

    If those CEOs were working 50 times harder wouldn’t the compassionate thing be to give them psychiatric care instead of bloated salaries?

  4. blf says

    The mildly deranged penguin points out there is, somewhat analogous to the relativistic time dilution effect, a salary dilution effect. In time dilution, a clock moving relative to the observer ticks more slowly than the observer’s own clock. Something similar also happens with salaries and other forms of payment. The salary &tc paid to a CEO appears to be out-of-proportion relative to the zillions of observing minions’s wallets because it is actually extortionate, hiding behind Chief Executive Officer being so much longer than minion — or the preferred serf.

  5. JustaTech says

    I do wish the nurse hadn’t cited that terrible paper claiming “medical errors are the 3rd leading cause of death” (they aren’t, that was some really tenuous extrapolation, see Science Based Medicine for detailed examination).
    But all of her points are solid, well-reasoned and supported.
    I will be supporting whoever runs against Sen Walsh, because this person clearly does not have the best interests of her constituents in mind.

  6. vucodlak says

    @ starfleetdude, #2

    Insurers generally aren’t the villain they’re made out to be

    You’re right. They’re much, much worse. They deny care, delay approvals, create forests of confusing hoops that patients must jump through to get care, all because they know that many people who actually use the product they ostensibly provide will die or go bankrupt before they have to pay. Their profits are blood money, wrenched from the hands of the suffering and dead.

    One would be hard pressed to find worse scum, but because health insurance companies murder people with (proprietary) numbers and formulae it’s hard to count the deaths, and harder still to pin the body-count on them. Thousands of preventable deaths every year would be a conservative estimate- and that doesn’t even get into the millions who suffer just so insurers can squeeze a few more dollars out them.