By Rebecca Adams, CQ HealthBeat Associate Editor
August 4, 2011 -- Doctors’ offices in Ontario, Canada, spend about $22,205 per physician per year to bill Canada’s single-payer agency—about 27 percent of the $82,975 that U.S. doctors spend annually to process claims, according to an article published in Health Affairs.
If doctors in the United States could lower their administrative costs to match those of Ontario physicians, the analysis said, the total savings would be about $27.6 billion per year. The article, supported by The Commonwealth Fund, found that medical assistants in the United States spend almost 21 hours per week interacting with health insurance plans and government health programs, which was almost 10 times more than in Ontario. American clerical staff spend 53.1 hours per physician per week on administrative tasks related to insurance, such as billing, compared with 15.9 hours in Ontario.
Ontario’s population is about one-third of the Canadian population and the researchers said the results would be similar if they had surveyed the entire nation.
Total medical spending per person in the United States is about $7,290 per year compared with $3,895 per year in Canada, which represents an 87 percent difference. Some of those additional costs come from meeting different requirements for billing, receiving prior authorization for medical services and sorting out coverage offered by various insurance plans.
About 216 Canadian physicians and administrators responded to the survey. The article was written by six researchers in Canada, New York and Colorado. The lead author was Dante Morra, an assistant professor in the Department of Medicine, University of Toronto, in Ontario.
The authors noted that their findings were similar to another study that found per capita administrative costs in Canada were about 29 percent of U.S. costs.
“There is broad agreement we can do better . . . Everyone would agree that there are efficiencies yet to be achieved,” said Susan Pisano, a spokeswoman for America’s Health Insurance Plans.
However, Pisano noted that there are several limits to the study beyond the fact that it is based on survey data rather than data from direct observations that can be verified. First, the survey was conducted in 2006. Since then, a number of changes have occurred in the marketplace. For instance, Pisano said, many insurers have changed the way they do prior authorization by requiring it for a smaller set of services and automating much of the process. Insurers have also simplified and automated other administrative tasks, she said.
Another issue is that the U.S. costs also included administrative costs related to Medicare, the federal program for the elderly and people with disabilities, as well as Medicaid, the federal-state program for the poor.
Rebecca Adams can be reached at [email protected].