Use of administrative personnel in hospitals: a three nation comparison

Differences in the costs of health care systems among industrialized countries has been the focus of several studies. Labor costs, specifically the amount of resources used for administration, are considered to contribute to differences in overall health care costs. To determine differences in the use of labor resources, especially administrative and managerial, among American, Austrian and German hospitals, we use a convenience sample of one Austrian, one German and two United States (US) tertiary care centers. In our analysis we used payroll data of the four hospitals. First, we categorized job titles and created job categories. Subsequently, we calculated full time equivalents (FTEs) per job category and compared them across countries. Adjustments were made for differences in health systems. The main outcome measures were FTEs per patient day and per discharge in each job category. In the US hospitals > 19% of FTEs were in administrative categories as compared with < 8% in the European hospitals. For administrative managers, US hospitals used > 11 times the labor per patient day of the European institutions. Among administrative areas, the largest absolute FTE difference was in financial operations. US hospitals used > 5 FTEs of personnel per 10,000 patient days versus < 1.0 FTE in the European hospitals. Given the kinds of administrative work done in US hospitals compared to Austria and Germany, differences in the organization and financing of these countries' health care systems may account for an important part of the higher number of US personnel.