In a groundbreaking study published in the journal JAMA Network Open, researchers from Hunter College of the City University of New York, Harvard Medical School, the Veterans Health Administration (VHA), and the University of Washington have discovered that the Veterans Health Administration operates more efficiently than private-sector hospitals, clinics, and insurers.
The research points to the bureaucracy and bloat within profit-driven private facilities and insurers, revealing that a staggering 30% of staff in these entities are entangled in paperwork, while the VHA maintains a lean 22.5% administrative staff. The findings suggest that almost 900,000 fewer administrative staff would be needed if the private healthcare sector adopted the VHA’s streamlined approach.
Lead author Dr. Steffie Woolhandler emphasizes that the profit-oriented system in the private sector rewards providers for investing in administrative activities, such as marketing and questionable billing practices, rather than focusing on patient care. In contrast, the VHA prioritizes patient well-being, leading to superior care compared to the private sector, as indicated by recent studies.
Dr. Andrew Wilper, Chief of Staff at the Boise, Idaho VHA and associate professor of medicine at the University of Washington, underscores the VHA’s commitment to caring for veterans without prioritizing financial gains. The researchers analyzed data from a Census Bureau survey of 3.2 million Americans, including health care workers in both the private sector and VHA, revealing the significant disparity in administrative efficiency.
The study concludes that the VHA’s approach, with lump-sum budgets covering almost all operations and a focus on patient care rather than profits, serves as a model for a more efficient and effective healthcare system.