"Because many providers care for patients insured by numerous private and public plans, they must contend with multiple payment schedules, claims forms and credentialing requirements. These complicated requirements create wasteful excess costs and do little to improve the quality of care," said Commonwealth Fund President Karen Davis. "A high performing health care system is only possible with improved coordination and elimination of waste—not only between physicians and insurers but in all parts of the health care delivery system."
“To get to a health care system that is high-quality and delivers better value for everyone, we have to address the skyrocketing price of health care’s administrative costs,” said Risa Lavizzo-Mourey, M.D., M.B.A., president and CEO of the Robert Wood Johnson Foundation. “Administrative costs will never be zero, but we need to make sure that administrative interactions improve the quality of care by working to make care safer and more efficient and rewarding health care providers who successfully reduce excessive care and provide the right treatment at the right time.”
A Closer Look at Billing and Insurance-Related Costs
A separate study, also published in today’s online issue of Health Affairs and co-funded by The Commonwealth Fund and the HCFO, provides an in-depth look at the billing and insurance-related activities performed at a large multi-site, multi-specialty group practice in California to get paid for clinical services. The study found that clinicians spent more than 35 minutes per day performing billing and insurance-related tasks and that these activities also required the equivalent of 0.67 non-clinical full time staff per full-time physician at an annual cost of $85,276 per physician, representing 10 percent of operating revenue.
The authors note that even though the practice studied uses an electronic medical record system for billing and clinical record keeping and has implemented extensive automation, the complexity of serving patients covered by hundreds of specific insurance plans, each with different benefits, payment rates and billing procedures, greatly adds to the administrative workload. The challenge of managing these widely varying requirements increase the chance of billing error and dispute and the likelihood of requiring payment follow-up and collections.
"We believe that while minimizing billing and insurance-related administration activities is not the only goal of the health care system reform, standardizing health plan features and processing requirements presents a tremendous opportunity for improving efficiency in a multi-payer health care system," said lead study author Julie Sakowski, Ph.D., a senior health services researcher at the Sutter Health Institute for Research and Education.