Mar 15, 2019 / Robert Lord
In War and Peace, Leo Tolstoy wrote, “Writing laws is easy, but governing is difficult.” It’s hard to imagine that in 1867, Tolstoy was writing about the regulatory burden on American hospitals, but he might as well have been.
When it comes to governing health care, lawmakers and regulators can sometimes use an overly heavy hand. According to a report from the American Hospital Association, hospitals need to comply with 629 distinct regulatory requirements. That number only accounts for four agencies and doesn’t even begin to include requirements from state governments, courts and a whole host of smaller federal agencies and departments.
The cost of complying with these regulations is nothing short of astonishing. Hospitals spend roughly $39 billion per year on administrative activities around compliance with federal regulations. For perspective, that’s equal to well over half the entire discretionary budget for the Department of Health and Human Services. Breaking that number down, it means an average-size community hospital will spend $7.6 million annually on compliance, or $1,200 for every patient admitted.
Hospital regulations, while almost universally good-intentioned, can inadvertently serve to entangle patient care in a web of sometimes unnecessary requirements and “box checks,” and the lion’s share of that $39 billion goes toward untangling the web. This untangling is no small feat. According to the AHA, an average hospital needs the equivalent of 59 full-time employees to manage their compliance issues. All too often, hospitals don’t have the personnel to dedicate to the task, and on average more than a quarter of compliance work is done by physicians, nurses and other health professionals who could be devoting that time to patient care.