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Background <p>Administrative costs in U.S. non-profit acute care hospitals are widely reported to be high and rising, yet hospital administrators are largely exempt from the productivity measurement. We introduce the Administrative Accountability Gap (AAG), the systematic exemption of administrative functions from the cost-per-output accountability criteria imposed on every other clinical workforce category and ask whether high administrative cost is structurally inevitable or a governance issue.</p> Methods <p>We develop the AAG construct through principal-agent theory and operationalize it using the formally designated Administrative and General (A&amp;G) cost center from CMS HCRIS Worksheet A. We analyzed 6,354 non-profit hospital-year observations across fiscal years 2021–2023. We complement the empirical analysis with an illustrative management accounting framework applied to a model hospital, with sensitivity analysis.</p> Results <p>Among 2,142 non-profit acute care hospitals in FY2023, median A&amp;G cost was 17.9% of total cost (Ranged 12.4% (10th percentile) − 25.1% (90th percentile)). Non-profit A&amp;G share (17.9%) differed significantly from for-profit (20.3%) and government (15.4%) hospitals (<i>p</i> &lt; 0.001). Using an illustrative model, we show that $0.56&#xa0;M–$3.64&#xa0;M in possible avoidable annual costs attributable to a single administrative domain.</p> Conclusions <p>Administrative cost intensity varies substantially among otherwise comparable non-profit hospitals, supporting the view that it reflects governance rather than necessity. Existing management accounting tools can close the AAG; we propose a framework and a research agenda for institutional validation. The principal barrier is the structural conflict of interest that allows administrators to design the measurement systems they are exempt from.</p>

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Who measures the measurers: Closing the administrative accountability gap in non-profit acute care hospitals

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  • 发表日期：

    2026年7月9日

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  • Mahua Dey

摘要

Background

Administrative costs in U.S. non-profit acute care hospitals are widely reported to be high and rising, yet hospital administrators are largely exempt from the productivity measurement. We introduce the Administrative Accountability Gap (AAG), the systematic exemption of administrative functions from the cost-per-output accountability criteria imposed on every other clinical workforce category and ask whether high administrative cost is structurally inevitable or a governance issue.

Methods

We develop the AAG construct through principal-agent theory and operationalize it using the formally designated Administrative and General (A&G) cost center from CMS HCRIS Worksheet A. We analyzed 6,354 non-profit hospital-year observations across fiscal years 2021–2023. We complement the empirical analysis with an illustrative management accounting framework applied to a model hospital, with sensitivity analysis.

Results

Among 2,142 non-profit acute care hospitals in FY2023, median A&G cost was 17.9% of total cost (Ranged 12.4% (10th percentile) − 25.1% (90th percentile)). Non-profit A&G share (17.9%) differed significantly from for-profit (20.3%) and government (15.4%) hospitals (p < 0.001). Using an illustrative model, we show that $0.56 M–$3.64 M in possible avoidable annual costs attributable to a single administrative domain.

Conclusions

Administrative cost intensity varies substantially among otherwise comparable non-profit hospitals, supporting the view that it reflects governance rather than necessity. Existing management accounting tools can close the AAG; we propose a framework and a research agenda for institutional validation. The principal barrier is the structural conflict of interest that allows administrators to design the measurement systems they are exempt from.