I have access to a research library which has a database of Wall Street Journal articles going back to the 19th century. Just for laughs, I decided to see what if anything may have turned up in the Journal about the younger Mitt Romney.
On December 2, 1983, he was quoted in an article about medicare reimbursement rates: "Hospitals Scramble to Track Costs As Insurers Limit Reimbursements" by Burt Schorr (Dec. 2, 1983, p. 31).
In December 1983, Romney was 36 years old and he was working for Bain Capital's parent company, the management consulting firm Bain & Co. He was what I would call a meta-consultant: he was a consultant who consulted with consulting firms. He was working with Travenol Management Associates (a division of the pharmaceutical firm Baxter Labs.) In October 1, 1983, Medicare began reimbursing hospitals based on standard costs for 467 different treatment categories: if a hospital did a procedure for less than the cost, it could keep the excess as profit.
Under Romney's guidance, Travenol discovered something which others have discovered many times in the 3 decades since 1983: treatment costs vary from one hospital to another. Travenol also discovered that hospitals can save money by cutting back staffing and paying healthcare professionals less. Romney and Travenol worked with a hospital in Ohio which:
ended over-staffing of its delivery-maternity unit by putting 40% of the assigned nurses on standby status. The nurses get only two hours' pay a day but are available for duty on short notice.This is what the Journal had to say about the young Mr. Romney, who a few months later would be picked to run Bain Capital:
Hospital administrators say Travenol's method of comparing treatment costs at different hospitals, part by part, takes hospital cost analysis a significant step further. Among other things. lt provides a composite "best demonstrated cost" for a particular hospital treatment, derived from the lowest-cost parts from all the institutions.
The idea originated with Bain & Co., a Boston management consulting firm. "We'd
done this on toothpaste, aluminum and blue jeans." says W. Mitt Romney. a Bain employee now assigned to Travenol, " but we didn`t know whether the concept would work in a hospital setting."