Health Affairs: U.S. spends 4x more than Canada on payor interaction
In contrast to Canada, U.S. physician practices spend nearly four times more interacting with payors, according to researchers in the August edition of Health Affairs.
“If U.S. physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year,” wrote Dante Morra, MD, MBA, assistant professor in the department of medicine at the University of Toronto in Ontario, and colleagues.
With an adjusted response rate of 78 percent, 216 Ontario-based physicians and administrators completed Morra and colleagues’ survey. The overall adjusted response rate for the U.S.-based physicians was 57.5 percent and the overall adjusted response rate for both countries combined was 60.5 percent.
The study found that per-physician costs in the U.S. averaged $82,975 annually, while Ontario-based physicians averaged $22,205. According to the authors, most of the difference stems from the fact that Canadian physicians deal with a single payor, in contrast to the multiple payors in the U.S.
As a result, the investigators concluded per capita health spending in the U.S. is 87 percent higher than in Canada—$7,290 versus $3,895 annually.
On average, U.S. doctors spent 3.4 hours per week interacting with health plans while doctors in Ontario spent about 2.2 hours. Nurses and medical assistants spent 20.6 hours per physician per week on administrative duties compared to their Canadian counterparts, who only spent 2.5 hours. “U.S. clerical staff spend 53.1 hours per physician per week on administrative tasks related to insurance, compared with 15.9 hours in Ontario,” the researchers reported, citing that most of the difference comes from the time U.S. clerical staff spend on billing (45.5 hours) and obtaining prior authorizations (6.3 hours).
Additionally, senior administrators in the U.S. spend much more time per physician than their Canadian counterparts on overseeing claims and billing tasks: 163.2 hours a year in the U.S. compared with 24.6 hours a year in Ontario, the study stated.
The authors admitted the study has several limitations beginning with the use of survey reponses rather than direct observation to estimate the time spent by physician practices on interactions with payors. “Second, our Canadian estimates are based on one Canadian province. Ontario is, however, the most populous province,” the authors reported, adding that the combined 60.5 weighted response rate might affect the generalizability of the results.
Although the U.S. is not currently moving toward a single-payor system, the researchers offered ways to reduce administrative costs, including standardizing transactions as much as possible and conducting them electronically rather than by mail, fax and phone. “These measures would not only reduce costs but would also reduce the so-called ‘hassle factor’ of physician and staff interruptions for phone calls that interfere with patient care,” the authors wrote.
“The price of inefficiencies is not only the cost measured in this study,” the authors concluded. “When these inefficiencies result in frequent interruptions in the work of physicians and their staff, they are likely to interfere with patient care. Everyone—health plans, physicians and their staffs, and patients—will be better off if inefficiencies in transactions between physicians and health plans can be reduced.”
“If U.S. physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year,” wrote Dante Morra, MD, MBA, assistant professor in the department of medicine at the University of Toronto in Ontario, and colleagues.
With an adjusted response rate of 78 percent, 216 Ontario-based physicians and administrators completed Morra and colleagues’ survey. The overall adjusted response rate for the U.S.-based physicians was 57.5 percent and the overall adjusted response rate for both countries combined was 60.5 percent.
The study found that per-physician costs in the U.S. averaged $82,975 annually, while Ontario-based physicians averaged $22,205. According to the authors, most of the difference stems from the fact that Canadian physicians deal with a single payor, in contrast to the multiple payors in the U.S.
As a result, the investigators concluded per capita health spending in the U.S. is 87 percent higher than in Canada—$7,290 versus $3,895 annually.
On average, U.S. doctors spent 3.4 hours per week interacting with health plans while doctors in Ontario spent about 2.2 hours. Nurses and medical assistants spent 20.6 hours per physician per week on administrative duties compared to their Canadian counterparts, who only spent 2.5 hours. “U.S. clerical staff spend 53.1 hours per physician per week on administrative tasks related to insurance, compared with 15.9 hours in Ontario,” the researchers reported, citing that most of the difference comes from the time U.S. clerical staff spend on billing (45.5 hours) and obtaining prior authorizations (6.3 hours).
Additionally, senior administrators in the U.S. spend much more time per physician than their Canadian counterparts on overseeing claims and billing tasks: 163.2 hours a year in the U.S. compared with 24.6 hours a year in Ontario, the study stated.
The authors admitted the study has several limitations beginning with the use of survey reponses rather than direct observation to estimate the time spent by physician practices on interactions with payors. “Second, our Canadian estimates are based on one Canadian province. Ontario is, however, the most populous province,” the authors reported, adding that the combined 60.5 weighted response rate might affect the generalizability of the results.
Although the U.S. is not currently moving toward a single-payor system, the researchers offered ways to reduce administrative costs, including standardizing transactions as much as possible and conducting them electronically rather than by mail, fax and phone. “These measures would not only reduce costs but would also reduce the so-called ‘hassle factor’ of physician and staff interruptions for phone calls that interfere with patient care,” the authors wrote.
“The price of inefficiencies is not only the cost measured in this study,” the authors concluded. “When these inefficiencies result in frequent interruptions in the work of physicians and their staff, they are likely to interfere with patient care. Everyone—health plans, physicians and their staffs, and patients—will be better off if inefficiencies in transactions between physicians and health plans can be reduced.”