Posted on 06/12/2009 2:24:50 AM PDT by neverdem
Primary care physicians spent the greatest amount of time dealing with health plan administrative tasks.
Physicians know that the phone calls, faxes and e-mails sent between their practices and health plans take time. Researchers have determined how much time it takes and what it costs.
A study published online May 14 in Health Affairs estimates that practices' interactions with insurers cost $23.2 billion to $31 billion a year. The average physician spends 43 minutes per work day -- more than three hours a week -- dealing with health plan administrative requirements.
The time physicians, nurses and other practice staff spend interacting with insurers costs an average of $68,274 per physician per year.
The survey found that the average primary care physician in a solo or two-physician practice spends 4.3 hours per week dealing with plans, on everything from contracting to reporting quality data.
Primary care physicians spent significantly more time, on average, dealing with insurers than do specialists and surgeons. The average primary care physician, across all practice sizes, spent 3.5 hours on health plans' administrative requirements, while medical specialists spent an average of 2.6 hours, and surgical specialists spent 2.1 hours.
Ted Epperly, MD, president of the American Academy of Family Physicians, said the results confirmed what family doctors already knew. "The disproportionate share of this is borne by the primary care physicians -- we end up eating [the cost]."
The study was conducted by researchers affiliated with the Medical Group Management Assn., Weill Cornell Medical College in New York, University of Toronto and University of Chicago. It was based on surveys answered by 895 physicians and practice administrators, who estimated the time they and staff spent dealing with health plans' preauthorization requirements, formularies, claims and appeals.
The annual $31 billion cost was derived by multiplying the average time spent by the estimated number of physician practices in the U.S. and converting that to dollars, using physician and staff compensation data from the Dept. of Labor, MGMA and American Medical Association.
Calculating the total using the median cost per physician resulted in an estimated $23.2 billion annual cost. Researchers removed extreme outliers in calculating the mean but wrote that the mean was higher than the median because some physicians reported spending large amounts of time dealing with health plans.
The MGMA, in conjunction with the release of the study, made recommendations to address the problem. If implemented, the group estimates that their changes would save $40.4 billion over 10 years.
"Compared to changing physician practice patterns, it would be somewhat easier to change some of the administrative procedures," said MGMA President and CEO William F. Jessee, MD.
The MGMA recommends that:
Physician leaders say the study's findings will prove to policymakers that payment procedures need to be simplified and standardized.
Last year the AMA launched its "Heal the Claims Process" campaign to address the cost of getting paid for care. According to one estimate the AMA cited, physicians spend as much as 14% of their revenue on efforts to get paid promptly and for the contracted amount.
As it launched the campaign along with a report card on each of the major insurers' administrative efficiency and accuracy, the AMA called for health plans to invest in making claims payments faster and more accurate. The AMA also has published guides for physicians to improve their own claims handling and to save time and money by submitting claims electronically.
Dr. Epperly said he doesn't believe insurers will make changes and standardizations voluntarily, because speeding payments would rob them of the interest they make off the premiums they "float" while processing claims. "It's in their financial interest to delay this as long as possible. Until they are forced to do it, they won't do it."
But Robert Zirkelbach, spokesman for the trade group America's Health Insurance Plans, disagreed.
"Any industry has a strong incentive to serve their customers well," Zirkelbach said. "Our goal is to make the system more efficient to improve care for patients and to reduce health care costs."
He pointed to efforts to adopt real-time claims adjudication as evidence that health plans are looking to streamline administrative processes for physicians and patients. "There's an opportunity to achieve significant cost savings if we can make the health care system more efficient."
Asked what would be a reasonable amount of time for physicians to spend dealing with health plans, Dr. Jessee's response was: "less."
"It'll never be zero. There is some legitimate cost." But some of those billions of dollars are wasted, he said, and policymakers can use that as grounds to demand reform from insurers.
In the meantime, as more health plans implement and expand quality reporting and associated pay-for-performance programs, the demands on physicians will only rise, Dr. Jessee said.
"The potential is there for that to become a more expensive undertaking if the plans don't standardize what they ask physicians to report."
The print version of this content appeared in the June 8, 2009 issue of American Medical News.
The time a practice spends dealing with health plans' administrative requirements, and thus the costs involved, varies by specialty and size. Here are selected means for 2006, as reported by Health Affairs.
| 1-2 doctors | 3-9 doctors | 10+ doctors | Weighted mean | |
|---|---|---|---|---|
| Primary care | $72,675 | $63,611 | $57,480 | $64,859 |
| Medical specialty | $70,788 | $87,566 | $78,553 | $78,913 |
| Surgical specialty | $61,187 | $76,429 | $59,866 | $66,954 |
Source: "What Does It Cost Physician Practices To Interact With Health Insurance Plans?" Health Affairs, May 14 (content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w533)
Dealing with health plans' administrative requirements takes time, not only from physicians but also from nursing and office staff. Here is the mean annual value of hours spent in 2006, broken down by physician time and staff time in different sizes and types of practices.
| 1-2 doctors | 3-9 doctors | 10+ doctors | Weighted mean | |
|---|---|---|---|---|
| Physician time | ||||
| Primary care | $16,864 | $12,858 | $11,118 | $13,691 |
| Medical specialist | $23,083 | $20,850 | $18,014 | $20,497 |
| Surgical specialist | $15,197 | $18,091 | $16,814 | $16,669 |
| Nurse time | ||||
| Primary care | $16,079 | $25,142 | $25,618 | $22,254 |
| Medical specialty | $13,279 | $29,000 | $24,731 | $22,449 |
| Surgical specialty | $13,328 | $26,391 | $20,426 | $19,935 |
| Clerical staff time | ||||
| Primary care | $31,666 | $21,833 | $17,918 | $23,980 |
| Medical specialty | $27,595 | $32,411 | $20,038 | $26,279 |
| Surgical specialty | $27,977 | $29,118 | $19,180 | $26,650 |
Note: time spent by senior administrators, lawyers and accountants is not included. Source: "What Does It Cost Physician Practices To Interact With Health Insurance Plans?" Health Affairs, May 14 (content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w533)
The same government boobs that have given us the Space Shuttle, public housing slums, oversight and massive regulation of banks, prudent budgests, 22% graduation rates in urban skools, ethanol will now finish off medicine.
The notion that a government take over of health care will somehow reduce paperwork seems manifestly counterintuitive.
You do have a gift for understatement don’t you! ;>)
They would have similar costs if they had to collect from each patient-maybe more.
You either ignore or are unaware that medical concerns also have to collect from each patient as well as from insurers due to co-pays and deductables. There is no foregone expense involved as you seem to believe.
Not even close.
They’ll be studies that say other wise.
/sarc.
That’s the great thing about a study. It finds that whatever the sponsor wants to be true, is true.
There is a huge difference in collecting $100 and collecting thousands of dollars for a procedure.
If we each had to pay full price for every procedure, we would be spending a lot more time discussing the alternatives to care with our doctors as well as negotiating price and payment terms. These things take time for doctors as well as all professionals.
My wife just had a procedure which cost 14k. If that were coming from our pocket directly we would have gotten several quotes from several doctors and had looked seriously at lesser cost alternatives. If we then decided that it was necessary we would have then spent more time discussing payment terms.
There is an economic cost to these things regardless of whomever does them.
Remember, for better accuracy, multiply all federal projections by a factor of 3.
When the Pay Czar tires of tormenting corporate executives, he focus his attention on the huge pool of doctors. The only protected group will be the trial lawyers.
What you say is very true. Unfortunately for your logic the process you describe is called competition and rational choice between alternatives, and these process tend to lower costs, not raise them. Costs tend to rise when the decision making process is divorced from and insulated from the direct economic consequences. And these costs are not just the direct ones. Everyone suffers because scarce resources are allocated to less than their best use.
I’d like to recommend a book to you called “Knowledge and Decisions” by Thomas Sowell. I think you would find it a very interesting read.
These numbers are far too low. The doctors themselves may only spend three hours a week working on insurers’ admin tasks, but in fact their actual cost is much higher because most of them have to employ people full time to deal with these matters. Staff must continually attend trainings just in order to fill out the paperwork in a manner that will get the claims approved. The staff members’ salaries + benefits far exceed the numbers set out on these charts.
Then that would be Comrade Obama’s ‘Doctor’s Plot’.
The notion that a government take over of health care will somehow reduce paperwork seems manifestly counter-intuitive.
Very well stated. Unfortunately, the typical Obama-voter will have no idea what you are stating.
I have choice now. I am self employed and my health cost bill is about 20k per year. I can self insure and I do to a certain extent.
My current insurance company is able to negotiate great rates with our doctors, take care of a lot of the paper work for me and they provide payment plans (premiums) which smooth out my costs.
I have had companies before which refused to pay some of my doctors a good price and they in turn refused to do business with my insurance company. I in turn switched companies.
I have had doctors (like orthodontists) where we have spent a fair amount of time discussing his rates and his payment plans. Every month his office needs to send me a bill and every month we need to pay it. I imagine if I did not pay it, the office staff would have to get the doctor involved. I also imagine the doctor has to take time reviewing his various accounts.
You may argue that these costs in this study are too high but the alternatives have administrative costs as well and its not clear to me that they would otherwise be lower and they certainly would not be nonexistent like this study tries to imply.
I spend very little time with private insurance. It is the Medicare paper work that is really a burden. All those forms for everything from oxygen,shoes,insulin and supplies. And let us not forget the FMLA papers. The government rules and regulations are a much bigger burden. Now they are trying to force e-RX’s that take twice the time as hand written ones. I rarely interact with private insurance.
Not. Collecting cash is much easier. Lets go back to 1970’s when the patient payed cash and the patient had the responsibility of the insurance paper work to collect their money. It was the patients responsibility to do their own paper work as the contract was between the patient and the insurance company. Now physicians have to HIRE employees at a hugh expense to file all the insurance claims. That is expensive.
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