John Goodman discusses the problems in attempting to classify expenditures as "administrative" (or not). He notes:
Think about a doctor's office and ask yourself what goes on there that you would be inclined to call "administration" or "overhead" and what you would call "medical care." Arguably, the physical facility, the equipment, and the utilities are all overhead. The personnel who admit you and discharge you are engaged in administration, are they not? Ditto for the taking of your medical history and your vitals -- and even ascertaining the nature of the complaint that brought you there. In fact, you could make a case that unless someone is actually drawing blood, giving you a shot or ordering a prescription, it's all overhead.And if the definition of what counts as "overhead" makes a difference between turning a profit or enduring a loss, we can be sure than there will be intense political gamesmanship over how government defines "overhead" and "administrative" costs.
