New Study: U.S. Physician Practices Spend Four Times More Than Canadian Practices on Dealing with Health Insurers

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<p>Administrative costs are a major factor in the high cost of health care in America. One significant component is the expense physicians incur when they have to deal with multiple health insurers. In a new <a href="/publications/journal-article/2011/aug/us-physician-practices-spend-nearly-four-times-much-money"><em>Health Affairs</em> study</a> comparing these costs in the U.S. and Canada, Commonwealth Fund–supported researchers show just how much more U.S. practices spend than their counterparts across the border. </p>
<p>Based on survey research, the authors, led by the University of Toronto’s Dante Morra, report that the time and labor spent by U.S. physician practices on filing claims, billing, obtaining prior authorization for patient services, and dealing with pharmaceutical formularies amounts to at least $82,975 per physician annually. That figure dwarfs the $22,205 spent by practices in Ontario, which operates within Canada’s predominantly single-payer health system.</p>
<p>Commenting on the <a href="/publications/journal-article/2011/aug/us-physician-practices-spend-nearly-four-times-much-money">new study</a>, Commonwealth Fund president Karen Davis cited an inefficient and fragmented insurance system as a contributor to high costs in the U.S. "Greater continuity of insurance coverage and administrative simplification reforms in the Affordable Care Act can begin to streamline health care administration and reduce the time medical staff must spend on billing and authorization issues," she said. </p>
<p>The authors of the study estimate total savings of about $27.6 billion per year if U.S. physician practices had administrative costs similar to those in Ontario. <br /></p>