We end up talking about bureaucracy a great deal on this blog because, well, there is an awful lot of bureaucracy involved in America’s highly regulated healthcare system. It doesn’t really matter whether you’re a doctor or a patient, there are always a ridiculous number of forms to fill out, reports to complete, questionnaires to complete or pages to sign.
How many pages are there? Frankly, no one knows. There are far too many sources creating these things, including over 3,000 private health insurers, Medicare, Medicaid, the FDA, DEA, CDC, the Veterans Administration, disability insurers, and what must be hundreds of other state and federal agencies that regulate healthcare one way or another. And that does not include all of the people and organizations whom we would normally consider to be “providers” of clinical care. Go to any hospital or ambulatory care center for a simple out-patient surgery and you’ll be inundated with forms, questionnaires, waivers, notifications and notices. The same thing applies more or less to medical practices and pharmacies.
However thanks to the Paperwork Reduction Act, at least the federal government is required to estimate how much time all of us have to spend filling out paperwork required in order to comply with federally mandated laws, rules and regulations. The totals are mind-boggling. They’re spelled out in a 314-page document entitled “The Information collection Budget of the United States, 2011”.
Looking at Figure 1 from this report there are a couple of things that stand out. First, the number of hours Americans had to spend filling out paperwork for the federal government grew by over 34% between 2000 and 2009, from approximately 7.3 billion hours to about 9.8 billion hours. The total then fell considerably in 2010 to 8.8 billion hours in 2010, for a net increase of only 21% between 2000 and 2010.
In the way of explanation, the dashed red line indicates the burden of paperwork that is “discretionary” as far as government agencies are concerned, i.e., it’s paperwork that the agencies chose to impose because they thought it was a good idea. The blue line depicts the sum of discretionary paperwork plus paperwork imposed as the result of Congressional legislation.
You might think that a decline of one billion hours in a single year is great news, except the reduction is almost entirely due to federal agencies deciding that filling out their forms didn’t take as much time as they thought it did. The forms hadn’t changed, just their estimates of how long it took to fill them out. In Washington terms, you might say that all of those extra hours went “off budget”. Figure 2 shows the causes of changes in estimated paperwork burden for each year. As you can see, a substantial amount of the decline due to changes in estimates was offset by new laws requiring the collection of yet more information. These new laws increased the amount of paperwork by 352 million hours in fiscal year 2010 alone. Over 15 million of those hours were attributed to the earliest stages of the Affordable Care Act (“ObamaCare”).
Naturally not all government agencies are identical in terms of the paperwork burden they incur. It makes sense that the Department of the Treasury accounts for the most – 6.4 billion of the 8.7 billion hours, some 74% of the total. The vast majority of this consists of income tax filings.
But to patients, clinicians and anyone else interested in healthcare, the real story isn’t so much in the total government numbers, but the astonishing and unrelenting increase in both the amount of paperwork directed at healthcare, and healthcare’s share of the total federal regulatory paperwork burden. For the purposes of assessing we’ll remove the numbers for the U.S. Treasury. The burden of tax filing is rather unique in that: (1) it affects virtually everyone in the country; and (2) it’s more akin to billing than regulation.
We crunched the numbers from all of the federal government’s “Information Budget” reports since 1999. The next figure shows what happens if you remove all of the regulatory paperwork attributable to the Department of Treasury, and compare what’s left to the paperwork generated solely by the Department of Health and Human Services (HHS).
After the Treasury Department, HHS is the single most burdensome agency in the federal government with respect to paperwork. It accounted for 542 million hours in FY 2010, a staggering 331% increase since 1999. Only 15 million of those hours were attributed to the earliest stages of the Affordable Care Act (“ObamaCare”). That shouldn’t be surprising. After all, the vast majority of ACA regulations don’t kick in after 2013. After that the number and invasiveness of the law’s provisions escalate rapidly, and the paperwork that it requires will as well.
If we take a close look at this graph, here are a couple of things that really stand out. First, since 1999 the amount of healthcare-related paperwork has been doubling every five years. Second, remember how the amount of federal paperwork “fell” in 2010 when the government decided to re-estimate how much time it took to fill out its forms? Instead of dropping as it did for many other departments, the total number of hours required to complete healthcare paperwork actually rose. This can only have occurred if: (a) HHS did not reduce the estimated number of hours per form; (b) the volume of forms increased, or a combination of the two. The report does not tell us whether or not HHS re-estimated the time required to complete its forms. If it did, the total increase in the number of HHS forms required in 2010 was very large indeed.
Another way of looking at the burden of HHS-related paperwork is to measure it as a proportion of all non-Treasury paperwork that Americans have to complete in the course of each year. This information is shown in the graph below.
As you can see, the paperwork required by HHS is growing so fast that it now accounts for almost 40% of all non-Treasury paperwork required – dwarfing the individual contributions of agencies like the EPA (which regulates every discharge in the nation), the SEC (which regulates Wall Street and all of the financial markets), the Department of Homeland Security (which covers immigration and security at every port of entry in the nation), the USDA (which inspects every food processing center and slaughterhouse), and even a Department of Labor that covers every single worker and employer in the country.
Another interesting statistic coming from the report is that HHS is also the nation’s foremost violator of the Federal Paperwork Reduction Act:
“OMB is reporting 110 violations during FY 2010. This is an increase of 34 violations from FY 2009 and an increase of 57 violations from FY 2008. This increase is largely driven by the 65 PRA violations from Department of Health and Human Services, which represents nearly 60 percent of the total violations in FY 2010.”
Most of these violations occur because HHS place forms into use before OMB approval has been obtained. They go away when OMB approves the forms, which it always seems to do.
Frankly, all of these numbers are a bit numbing after a while. As Stalin once said, “One death is a tragedy; one million is a statistic.” What does 542 million hours filling out paperwork really mean? Consider this. It’s equivalent to 271,000 people employed in the private sector, doing absolutely nothing day in and day out other than completing paperwork at the behest of HHS. If these people were all in a single private company, it would be the 13th largest employer in the U.S., right between Kroger and Albertson’s. Given the trend of the past decade, however, the number of full-time employees needed to fill out forms for HHS will double to 542,000 by 2015. This will make HHS paperwork the second largest employer in the country, right behind Wal-Mart. If we assume that each of these people is making an average of $35,000 per year plus $10,000 in benefits, the total cost in 2015 will be just under $25 billion. That’s just the lowball estimation of paperwork cost for one agency, for one year; and it doesn’t even include the enormous increases that will occur as a result of the Affordable Care Act.
Of course there probably are very few people who really are employed full-time filling out forms for HHS, but the economic impact of this particular government regulation is exactly the same as if there were. That means that really, millions upon millions of people are involved. The private sector personnel affected are patients, physicians, and the hordes of people hired by hospitals, clinics, nursing homes and private offices to fill out these forms for them. Now add to these all of the forms these same people have to fill out for private insurers, disability insurance, and everyone else, and you’re talking serious, budget-busting costs. If you want to know why your insurance premiums are rising at 9% per year, this is a big part of the answer.