A study in Health Affairs released this week finds that physicians
spend $31 billion a year in their interactions with healthcare plans,
composing 6.9 percent of all spending on physician and clinical services. That equates to three weeks of work spent solely on administration exchanges
between physicians and insurers. Lest you think the government has a monopoly on red tape.
The survey reviewed
tasks associated with prior authorization of services, as well as pharmaceuticals, claims and billing,
and data quality requirements. The findings reveal a disturbing trend of
physicians spending significant time, on average, doing the administrative tasks
associated with multiple and complex insurance products.
Nurses have it even worse. They average 23 weeks of full time per physician per year
coping with administrative duties. So be extra nice to them.
Single or two person medical practices have it the roughest. They spend more time
than their counterparts in larger practices in administrative exchanges
with insurers. The end result, of course, is increased cost—the more
time spent on administrative duties, the less time with patients—and
someone must be paid to perform these duties.
As pointed out by Health Affairs, administrative costs can
never be zero, but they should be as little as possible. As the Republicans and
Democrats get revved up to spar over a new healthcare reform package, this
study is an interesting observation of the downside of competing insurance
products that are overly complex and place multiple and diverse demands on
small practices.
Do electronic medical records solve this administrative
exchange conundrum? In theory, yes. But sadly, the current reality is that EMRs don't do much to help.
A second study published in Health Affairs gives a more detailed review of cost drivers of multi-specialty
and multi-site physician practices in California. The Commonwealth Fund study found that use of EMR technology did not substantially reduce the number of hours and
related costs of navigating and managing multiple insurance products and their
individual mandates and requirements.
The study determined that physicians spent an average of 35 minutes per day,
requiring two-thirds of a non-clinical, full-time staff member's time per physician to perform duties
related to insurance. That equates to an annual cost of
$85,000 per year, and represents 10 percent of operating revenue. The practice currently automates many of its tasks
through its EMR system.
So where does that leave us? Clearly the cost-cutting
initiative undertaken by the Obama Administration and those of healthcare
stakeholders will not be enough to gut the system of extraneous fat. While EMR
technology is a necessary and vital piece of cost savings, the layers of the
multiple players and the demands of institutionalized bureaucracy need to be
unraveled and woven into a much simpler, straight forward administrative
exchange blueprint that, in turn, may reduce fiscal waste.
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