If you’ve practiced medicine for more than a few years, you don’t need a policy paper, consulting report, or me to tell you that healthcare administration is inefficient. You feel it every day. In the number of clicks required to place a simple order. In meetings that generate more meetings. And in projects that seem to exist solely to justify someone’s job description.

What’s particularly maddening is that while healthcare administration costs continue to rise, physicians are often the public face of that frustration. When healthcare costs increase, physician compensation is frequently blamed, despite remaining relatively stagnant when adjusted for inflation. Meanwhile, the fastest-growing costs in healthcare over the past several decades have come from administration, not clinical care.

That disconnect is what prompted me to send the following one-minute blog in my newsletter recently.

My Original One-Minute Blog Post

[Healthcare] administration, especially at the hospital level, is incredibly inefficient and often ineffective. At the same time, rising administrative costs account for the majority of healthcare inflation over the past several decades. Yet when healthcare costs rise, doctors are the ones who absorb most of the public backlash, with physician compensation blamed despite remaining relatively stagnant compared to overall inflation.

I believe two well described but rarely acknowledged unnatural laws explain many of the problems we see in medical administration: the Peter Principle and Parkinson’s Law.

The Peter Principle states that within any organizational structure, people tend to be promoted until they reach a role where they are no longer competent. Someone may have been an excellent clinician, perhaps a hospitalist or department leader, but that does not automatically make them effective in a C-suite or executive role. The result is often mismanagement, slow decision-making, and institutional mediocrity.

Parkinson’s Law states that work expands to fill the time allotted to complete it. Give someone a week to finish a project and it will take a week. Give them two days and it will take two days. In medical administration, timelines are frequently vague or nonexistent. Projects drag on indefinitely, momentum is lost, and meaningful progress stalls.

Most of us practicing clinical medicine have seen these two unnatural laws play out repeatedly in real time. Inefficient leadership structures combined with unlimited timelines create exactly the administrative dysfunction we experience daily.

The real question is not whether this is happening. It’s how do we make it better?

The replies I received were thoughtful, nuanced, and frankly more interesting than the predictable “yes, admin is terrible” chorus. Two responses in particular captured the complexity of the problem far better than my one-minute blog ever could.

“The Problem Isn’t Just Physicians in Leadership”

One physician wrote back with an important counterpoint. In her experience, many healthcare administrators are not clinicians at all. They come from nursing, business, or non-clinical backgrounds, rise through corporate healthcare structures, and are promoted without meaningful accountability.

She described a department manager who is clearly ineffective yet remains protected by the system. Staff performance issues go unaddressed. We lower expectations instead of enforcing them. Physicians are left to absorb the downstream consequences or burn out trying to compensate.

This highlights a key reality: the Peter Principle does not only apply to physicians who transition into leadership roles. It applies just as much, if not more, to non-clinical administrators operating in environments where outcomes are difficult to measure and accountability is diffuse.

Unlike medicine, where poor performance is rapidly exposed, administrative roles often lack clear feedback loops. When things don’t work, the consequences are spread across hundreds of clinicians and thousands of patients. No single person “owns” the failure.

Over time, this creates a culture where incompetence is tolerated, expectations erode, and physicians are quietly trained to lower their standards in order to survive.

“Hospitals Are Businesses Disguised as Charities”

Another reply added even more texture. This physician pointed out something we rarely say out loud: modern hospitals are massive, highly regulated businesses that happen to deliver care. Their primary incentives are shaped by regulation, lobbying, system consolidation, and keeping care within their own walls.

Several uncomfortable truths emerged from this response:

• Hospitals are often the most expensive site of care, yet increasingly control where care occurs.
• Costs for identical procedures vary wildly by region with little transparency.
• Length of stay has dropped dramatically, yet total cost continues to rise.
• Hospitals once competed for physicians and patients. Now, the leverage has largely reversed thanks to changes in the medical system that now largely dictate where patients receive care.

From this perspective, many administrators are not incompetent in the traditional sense. They are responding rationally to a system that rewards complexity, compliance, and scale rather than efficiency or service.

This is an important distinction. It suggests that while administrative dysfunction feels personal to physicians, it is often structural. And structural problems require different solutions than simply replacing “bad leaders” with “good ones.”

Three Ways Doctors Can Improve the Situation and Regain Control

So where does this leave us?

If doctors are more and more left out in the cold rather than insiders in the system, what control do we have over how medicine evolves?

If the system is inefficient by design, administrators are insulated from accountability, and physicians are increasingly employees rather than independent professionals, what leverage do we actually have?

3 Ways Doctors Can Improve Medical Administration

I think there are three realistic areas where physicians can begin to regain control.

1. Reclaim Professional Standards Inside Broken Systems

One of the most corrosive effects of administrative dysfunction is the quiet erosion of standards. When medical assistants don’t reconcile medications accurately. When referrals are incomplete. Or when scheduling errors become routine. Over time, physicians accept this as normal, often with subtle pressure.

This is dangerous. Not just for patient care, but for physician identity.

Reclaiming standards does not mean becoming adversarial or combative. It means refusing to normalize incompetence. It means documenting issues clearly, escalating them consistently, and framing them around patient safety and operational risk rather than personal frustration.

Administrations respond poorly to complaints but respond very differently to risk, liability, and metrics tied to quality. Physicians who learn to speak that language gain leverage even within flawed systems.

This is exhausting work, which is why many physicians opt out. But collective apathy guarantees decline.

Personally, this is tough for me. I am a “head down, deal with whatever” kind of person. And this only became more ingrained during residency. But it actually does perpetuate a broken system. The idea is not to be a tattle tale, but rather to highlight important issues where real improvement can occur.

2. Be Selective About Leadership, Not Avoidant of It

Many physicians respond to administrative dysfunction by avoiding leadership roles altogether. This is understandable. The roles are time-consuming, often thankless, and frequently stripped of real authority.

But total disengagement creates a vacuum that will always be filled by someone else.

The answer is not that every physician should pursue leadership. It’s that physicians who do step into leadership should do so intentionally, with clarity about incentives, authority, and exit options.

Leadership without authority is a trap. Leadership without metrics is theater. And leadership without a clear end point is a recipe for burnout.

Physicians who understand this can help reshape leadership structures from the inside, even incrementally. Not perfectly. Not quickly. But meaningfully. I have a colleague who really has done a fantastic job of just this. He took frustration and channeled it into joining the medical staff council and has really effected change. It's a valuable lesson and model for me.

3. Support and Explore Alternative Care Models

Finally, we have to acknowledge that many of the most hopeful changes in medicine are happening outside traditional hospital systems.

Direct primary care. Ambulatory surgery centers. Independent specialty groups. Hybrid models that prioritize efficiency, transparency, and physician autonomy. Just yesterday I was speaking to a psychiatrist friend of mine who works in such a hybrid model and loves it. Basically, they are reducing care and improving outcomes using evidence based medicine. It gives me hope.

These models are not panaceas, and they may not be accessible to every physician or patient right now. I struggle to think of ways to make reconstructive plastic surgery fit in such a model. But they represent something important: proof that medicine does not have to be organized the way it currently is.

Even physicians who remain employed by large systems benefit when alternative models exist. They create competitive pressure. They expand the window of what is possible. And they remind healthcare administration that physicians do, in fact, have options.

Sometimes the most powerful form of leverage is simply the credible ability to walk away.

The Real Question

Healthcare administration is inefficient for reasons that are cultural, structural, and economic. The Peter Principle and Parkinson’s Law explain part of it. Regulatory complexity explains another part. Consolidation and misaligned incentives explain the rest. And yet more factors that we may not even be able to name right now likely exist.

But none of that absolves us of responsibility.

The real question is not whether this system is broken. It’s how much agency we are willing to reclaim within it, and where we are willing to draw lines.

Medicine is still a profession. But professions only exist if the people inside them are willing to defend standards, autonomy, and purpose.

And of course, I can't end this without pointing out that personal financial freedom gives doctors the ultimate trump card. If all doctors in the country were financially free, we would suddenly carry all of the leverage (more than administrators, hospitals, insurance companies, policy makers). We could improve healthcare in ways that right now seem unimaginable.

Here are some resources to help you become one of these financially free doctors making these impactful changes:

• What is the Bare Minimum Financial Knowledge that a Physician Needs?
• I Designed a DIY Financial Literacy Curriculum for Physicians
• 5 Steps That Took My Net Worth From –$500,000 to Millionaire
• 5 Easy Steps for Physicians Who Hate Personal Finance

What do you think? Why is healthcare administration so inefficient? Is it a systems issue or an individual level issue? What can doctors do about it? How can we make things better? Let me know in the comments below!