Total cost of medical practice interaction with insurers is $21-$31 billion a year

ENGLEWOOD, Colo., May 14, 2009 - Physicians spend three hours per week - or 43 minutes on average per workday - interacting with health insurance plans, according to research published today by Health Affairs. The study, conducted by the Medical Group Management Association (MGMA), Weil Cornell Medical College, the University of Toronto and the University of Chicago, found that total staff interaction time system wide converted to dollars equaled $21-$31 billion annually, or more than $68,000 per physician per year, on average. MGMA's Vice President of Practice Management Resources David N. Gans, MSHA, FACMPE and Senior Fellow Terry Hammons, MD, co-authored the study, "The Costs to Physician Practices of Interactions with Health Insurance Plans."

The research found that primary care physicians spend more time on these interactions than medical or surgical specialists. Nursing staff spend nearly four hours per physician per day interacting with plans; clerical staff spend 7.2 hours per day. Solo practitioners and their staffs spend up to 50 percent more time interacting with health plans than physicians in larger practices. Non physicians' staff time did not vary significantly by specialty.

The study classified interactions with health plans as authorization, formulary, claims/billing, credentialing, contracting and quality data. Of those interactions, practices spend the most time dealing with formularies:  physicians spend 1.3 hours per week and nursing staff spend 3.6 hours per physician per week. Primary care physicians spend the most time (1.7 hours weekly) on formulary issues. Physicians and their staffs spend the least amount of time on submitting or reviewing quality data.

"These data are yet another indicator of the dire need to streamline health care administration for physician practices," said William F. Jessee, MD, FACMPE, president and CEO of MGMA. "MGMA is committed to being part of the solution and has proposed three basic recommendations that could be enacted by Congress and the Administration right now.  Alone they could save physician offices nearly $40 billion dollars over the next ten years. While interactions with health plans by physicians and staff cannot be avoided entirely, we must collaborate on ways to reduce this resource expenditure to an acceptable level."

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