The Cost of Interacting with Insurance Plans

Aug 5, 2011, 1:00 PM, Posted by

A study published in the August 2011 issue of Health Affairs finds that physician practices in the United States spend significantly more time and money interacting with payers than their counterparts in Canada. For nurses and medical assistants, the disparity is huge.

The new study finds “substantial” costs in time and labor to work with multiple insurance plans, especially for small practices with just one or two physicians. Nursing staff and medical assistants in the United States spend nearly ten times more time than their counterparts in Ontario interacting with health plans. Nurses and medical assistants here spend 20.6 hours per physician per week interacting with health plans, compared to 2.5 hours per physician per week spent by Ontario nursing staff.

The study, based on surveys in both countries, estimates that overall, U.S. physician practices spend nearly four times more per physician per year in administrative costs interacting with health plans and payers than physician practices in Ontario. Canada has a single-payer health care system.

“If US physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year,” the authors write.

“The most striking differences between Ontario and the United States are in time spent by staff other than physicians on interactions with payers... U.S. nursing staff spent more time in every category of interaction—most notably, obtaining prior authorizations, on which U.S. nursing staff spent 13.1 hours per physician per week.”

“US Physician Practices Versus Canadians: Spending Nearly Four Times As Much Money Interacting With Payers,” is authored by Dante Morra, Sean Nicholson, Wendy Levinson, David N. Gans, Terry Hammons and Lawrence P. Casalino. It was funded by the Robert Wood Johnson Foundation and the Commonwealth Fund.

Read more about the study.

This commentary originally appeared on the RWJF Human Capital Blog. The views and opinions expressed here are those of the authors.