Lerch Bates Inc. Building Insight

Global Leaders in Technical Consulting for the Building Industry

Are Healthcare Insurance Costs the Real Problem?

As an operational and design professional, I have provided expertise which enables our healthcare clients to reduce operational costs and improve operational efficiencies. For the past thirty years, and working with hundreds of healthcare clients, I have found that pharmaceutical and medical/surgical supply costs represent a greater percentage of operational expenses than healthcare insurance.

This belief was strengthened after attending a recent healthcare conference. At this national healthcare conference, a well know healthcare speaker noted the current costs associated with hospital operations.  Costs were broken down into several categories and included:

Hospital operational costs, including such areas as:

  • Equipment Lease Costs
  • Supplies Costs (Medication, Med. / Surg. Supplies, etc.)
  • Physician Related Costs
  • Laboratory Testing Related Costs
  • Insurance Costs

This keynote speaker also noted that supplies represented the greatest opportunity to reduce operational healthcare costs and not healthcare insurance. I believe that our government should be challenging the healthcare industry to control supply and not insurance costs.

We should be improving healthcare operational processes in many areas: clinical operations, support service operations, procurement operations, physician practices, vendor relationships, business office procedures, etc.  Improving the economic performance of these areas has more potential than reforming the healthcare insurance industry.

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