By NextBestFitPublic review of hospital budgets
Under global budgets, administrative and executive costs are part of the negotiated budget.
Executive and admin costs reviewed within hospital budgets.
Review ledgerHow this path connects
This path
Public review of hospital budgets
Requires:
Global budgets for hospitalsU.S. prices are far higher than in other countriesChosenCreates or worsens
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Include admin and executive costs in hospital budget review
- Publish executive pay
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Executive pay and nonprofit status
Including administrative and executive costs in negotiated hospital budgets directly controls administrative spending and makes executive pay public and comparable.
- About $1 trillion a year in administrative cost
Negotiating administrative costs within hospital budgets directly controls administrative spending.
What it creates or worsens
- Makes performance and quality hard to oversee
Public budget review depends on negotiators who cannot judge every line item.
Who's affected
Who gains
- Taxpayers and public budgets
- Executive pay and nonprofit status: Tax exemptions for hospital systems forgo public revenue.
- About $1 trillion a year in administrative cost: Public programs pay for it too.
- Low- and middle-income households
- Executive pay and nonprofit status: Tax-exempt systems provide uneven community benefits.
- Doctors, nurses, and other clinicians
- About $1 trillion a year in administrative cost: Time goes to billing and insurer rules instead of patients.
- People with employer coverage
- About $1 trillion a year in administrative cost: Premiums pay for the administration.
Who loses
- Health care executives
- Executive pay and nonprofit status: Nonprofit hospital executives receive substantial compensation.
- Health insurers, brokers, and their shareholders
- About $1 trillion a year in administrative cost: Insurers, billing firms, and clearinghouses earn from the complexity.
- Insurance and billing workers
- About $1 trillion a year in administrative cost: Their jobs exist because of the complexity.
Where it has been tried
- Canadian hospitals: Executive pay disclosed publicly and capped in some provinces.
- Vermont: For fiscal 2025, Vermont's Green Mountain Care Board reviewed and established budgets for the state's 14 community hospitals.Sources: Green Mountain Care Board (2024)