A recent study published in Health Affairs concluded that U.S. physician practices spend $23-$31 billion worth of physician and staff time in interacting with health plans each year. For individual offices, that translates to $82,975 per year, according to researchers Dante Morra, an assistant professor of medicine at University of Toronto in Ontario, and Sean Nicholson, a policy professor at Cornell University in Ithaca, N.Y. The researchers compared the time and expense that U.S. medical offices spend working with insurers to their counterparts in Canada.
Not surprisingly, the difference in this administrative burden between Canada's single-payer system and the United States' numerous health plans--and myriad of varying rules to go along with them--is staggering.
In staff time alone, U.S. office employees spend nearly 21 hours each week interacting with insurers, that is, 10 times the hours staffers spend on such tasks in Canada. And while physicians in both countries have limited personal interaction with insurance companies, U.S. doctors still trump their neighbors to the north by almost an hour per week (3.4 hours versus 2.5).
These discrepancies account for a four-fold difference on our bottom lines. The team estimated that physician practices in Canada spend $22,205 per physician per year interacting with Canada's single-payer agency, while U.S. physicians spend $82,975 per doctor per year.
The specific tasks that suck up the most time of American employees include obtaining prior authorizations, determining drug coverage, and other reimbursement issues. Prior authorizations alone take up 13 weekly hours of employees' time and about a quarter of physicians' time spent dealing with insurers.
If U.S. medical practices had administrative costs similar to those in Canada, they could save nearly $28 billion a year, the researchers concluded. While acknowledging that U.S. doctors' offices will likely continue to deal with multiple payers for some time, making that goal unattainable, they noted that a recent proposed rule from HHS on standardizing and streamlining provider-payer communication is projected to save $12 billion for providers and insurers through reduced back-and-forth and fewer denied claims.
For the time being, however, the best recourse for cash-strapped U.S. practices is to do as much as possible to add efficiencies on their end.
Survey respondents agreed with researchers that standardizing transactions and cutting out phone, fax, and mail correspondence, instead relying mostly electronic transactions, would reduce their "hassle factor" in working with insurance companies, Medpage Today reports.
Because of the enormous impact reimbursement-related issues can have to practices' bottom lines, managers and administrators need to scrutinize their revenue cycles often and ensure staff adheres to best practices.
This process begins with hiring competent employees and extends to training and treating them well. In addition, take advantage of opportunities to automate processes whenever possible. On the flip side of that coin, don't underestimate the power of getting to know key employees of the health plans with which you work, as sometimes a quick phone call to a familiar individual is more effective than an impersonal website interaction. Again, it comes down to hiring people who have the right touch with patients, with physicians, and with employees on the other side of a claim. Finally, encourage everyone in the practice to contribute creative solutions to cutting down on time-consuming, costly problems and acknowledge their efforts.
These steps may not reduce the amount of work you put into insurance issues down to Canadian levels, but with so much practice revenue on the line, you can't afford not to try. - Deb