Re: Article siting expenditures on third-party payment

[Guest guest]

Link to original article.http://www.drugwonks.com/uploads/File/Health%20Affairs%20-%20Interactions%20Between%20Physician%20Practices%20and%20Health%20Plans%20Cost%20$31%20Billion%20a%20Year%20.pdf

===========================http://www.econ.wayne.edu/agoodman/7550/week13/Schoen-180AE91Fd01.pdfHow Health Insurance Design Affects Access To Care And Costs, By Income, In Eleven Countries

A recent study estimated that US practice staff members’ time devoted to insurance amounts to $68,000 per physician, or $31 billion a year.2020 Casalino LP, Nicholson S, Gans DN, Hammons T, Morra D, Karrison T, et al.What does it cost physician practices to interact with health insurance plans? Health Aff (Millwood). 2009;28(4):w533–43. DOI: 10.1377/hlthaff.28.4.w533.

=====================================http://content.healthaffairs.org/content/28/4/w533.abstractWhat Does It Cost Physician Practices To Interact With Health Insurance Plans?

Lawrence P. Casalino, Nicholson, N. Gans, Terry Hammons, Dante Morra, Theodore Karrison and Levinson

+ Author Affiliations

Division of Outcomes and Effectiveness Research, Weill Cornell Medical College, in New York City.

Larry Casalino (lac2021@...)

Abstract

Physicians have long expressed dissatisfaction with the time they and their staffs spend interacting with health plans. However,

little information exists about the extent of these

interactions. We conducted a national survey on this subject of physicians

and practice administrators. Physicians reported spending three hours weekly interacting with plans; nursing and clerical

staff spent much larger amounts of time. When time is converted to dollars, we estimate that the national time cost to practices

of interactions with plans is at least $23 billion to $31 billion each year.

A new way of looking at administrative costs—one key point of comparison in debating public and private health reform approaches.

========================================http://www.commonwealthfund.org/Content/Publications/In-the-Literature/2009/May/What-Does-It-Cost-Physician-Practices-to-Interact.aspx

http://www.commonwealthfund.org/~/media/Files/Publications/In%20the%20Literature/2009/May/What%20does%20It%20Cost%20Physician%20Practices%20to%20Interact/In%20the%20Literature.pdf

What Does It Cost Physician Practices to Interact with Health Insurance Plans?

May 14, 2009

Authors:

Lawrence P. Casalino, M.D., Ph.D., Nicholson, Ph.D., N. Gans, M.S., Terry Hammons, M.D.,

Dante Morra, M.D., M.B.A., Theodore Karrison, Ph.D., and Levinson, M.D.

Journal:

Health Affairs Web Exclusive, May 14, 2009, w533–w543

Contact:

Lawrence P. Casalino, M.D., Ph.D., Weill Cornell Medical College, lac2021@...

Summary Writers:

J. Gearon

SynopsisA national study of nearly 900 U.S. physicians and medical group administrators found that physicians spent on average 142 hours annually interacting with health plans, at an estimated annual cost to physician practices of $31 billion, or $68,274 on average per physician, per year.The IssueAdministrative

costs are high in health care. While those incurred by physician offices are a contributor to overall administrative costs, very little information has been available regarding the costs physician practices incur when they interact with health insurance plans. The authors surveyed a national sample of physicians and medical group administrators to ascertain how much time physician practices spent interacting with health plans on prior-authorization requirements, pharmaceutical formularies, claims, credentialing, contracting, and quality data. The study examines in depth the extent of such interactions, generating both time and dollar value estimates for such administration.

 Key FindingsPhysicians,

on average, spent nearly three weeks per year interacting with health plans, or 3.0 hours per week. Primary care physicians spent significantly more time (3.5 hours per week) than medical specialists (2.6 hours) or surgical specialists (2.1 hours).Nursing

staff spent an additional 23 weeks per year per physician interacting with health plans, while clerical staff spent 44 weeks.Compared

with other interactions, physicians, on average, spent more time dealing with formularies (1.7 hours per week for primary care doctors, for example), and the least on submitting or reviewing health plan quality data (0.04 hours per week for all physicians).Converted

into dollars, practices spent an average of $68,274 per physician per year interacting with health plans; primary care practices spent $64,859

annually per physician, nearly one-third of the income, plus benefits, of the typical primary care physician. This results in an estimated $31 billion per year spent by physician practices on interactions with health plans.Addressing the Problem

The

estimated $31 billion in costs physician practices incur in their interactions with health plans comprises 6.9 percent of all U.S. expenditures for physicians and clinical services. While administrative costs are often portrayed as waste, the authors note that such interactions may produce benefits, too. Prior authorization and formulary requirements, for example, may reduce health care costs and increase the quality of care. The authors suggest that researchers explore the benefits these high costs bring, as well as the possible policy and administrative procedure changes that would make physician–plan interactions more efficient. This could include, for example, centralizing the credentialing of physicians.About the StudyThe

authors randomly selected 1,310 private practice physicians working in solo or two-physician practices and those working in practices with three or more doctors. Physicians employed by academic medical centers, health maintenance organizations (HMOs), those with a large number of self-pay patients, and certain others were excluded from survey. Administrators from 629 medical groups were also surveyed. The survey was conducted in the second half of 2006 and had an adjusted overall response rate of 57.5 percent.The Bottom LineAlthough

health plans claim to have reduced the administrative burden they place

on physicians, evidence shows that the average physician spends nearly three weeks a year interacting with plans, at an estimated annual cost to practices of $31 billion. Primary care physicians, especially those in small practices, spend larger amounts of time interacting with plans than those in other specialties.

Citation

L. P. Casalino, S. Nicholson, D. N. Gans et al., “What

Does It Cost Physician Practices to Interact with Health Insurance Plans?” Health Affairs Web Exclusive, May 14, 2009, w533–w543.

=========================================http://www.ama-assn.org/ama1/pub/upload/mm/399/hsr-3590-faq.pdfhttp://www.ama-assn.org/ama/pub/health-system-reform/faq.shtml

Frequently Asked Questions aboutThe Patient Protection and Affordable Care ActEstimates from 2006 suggest that physicians spend three hours per week, their nursing staff spend 19 hours and their administrative staff spend 36 hours per week interacting with health plans. In total, the annual time cost of these activities is more than $68,000 per physician. Many of the administrative simplification provisions in the legislation would reduce these costs.

-----------------Referenced here, too - http://www.practicebuilders.com/newsletter/2010-05-20_05.asp===================== Locke, MD

=====================

 

Anyone can give me the reference for the study that came out showing that we annually spend on average $68,000 per physician in this country for processing claims?

I've seen that come up from time to time but am trying to put my hands on the reference.

Many thanks,

Jack

[Guest guest]

You may want to check out this article, too.It talks about time allocation for billing.No time to find a pdf.Good Luck. Locke, MDhttp://www.commonwealthfund.org/Content/Publications/In-the-Literature/2009/May/Peering-into-the-Black-Box.aspx

Peering into the Black Box: Billing and Insurance Activities in a Medical Group

May 14, 2009

Authors:

A. Sakowski, Ph.D., G. Kahn, M.D., Ph.D., G. Kronick, Ph.D., M. Newman, M.D., Ph.D., and Harold S. Luft, Ph.D.

Journal:

Health Affairs Web Exclusive, May 14, 2009, w544–w554

Contact:

A. Sakowski, Sutter Institute for Research and Education, sakowsj@...

Summary Writers:

Martha Hostetter

Health Affairs article is available at: http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w544

Synopsis A

close analysis of the costs of billing and insurance tasks in a large medical group practice found that such tasks consume $85,276 per full-time equivalent physician—or 10 percent of operating revenue. Standardizing health plan benefits and billing procedures would reduce administrative complexity and costs.  

 The IssueHealth

care organizations spend significant resources on the billing and insurance tasks required to secure payment for clinical services. Greater understanding of the time spent on various tasks could inform policy changes intended to simplify health care financing and reduce administrative costs. Key Findings At

one large multispecialty medical group, a total of 0.67 nonclinical full-time equivalent (FTE) staff worked on billing and insurance activities for each FTE physician. Thirty-eight percent of non-clinical personnel working on billing and insurance activities, or 0.25 full-time employees per full-time physician, were performing tasks related to collecting payment, such as creating and filing claims, processing payments, and claim follow-up and payment reconciliation. Physicians

reported spending an average of 35 minutes per day on billing and insurance activities; other clinical staff spent 38 minutes per day on such activities.   In 2006, the cost of billing and insurance amounted to $85,276 per FTE physician—10 percent of operating revenue.Addressing the Problem

The current multipayer financing system makes billing and insurance tasks complicated and costly. Automation

of certain tasks appears to have the potential to increase efficiency by reducing claim denials, ensuring coding compliance, and shortening the time to collect accounts receivable. Policies that call for strict standardization of health plan features and billing procedures have the potential to achieve efficiencies and reduce the costs related to billing and insurance. About the Study The

authors quantified the costs related to the billing and insurance activities undertaken at a multispecialty medical group in order to receive payments for clinical services. Previous work has provided national estimates of the time spent on such activities; this study provided detail on the resources required to perform specific administrative tasks. Focusing on a large medical group in California, with more than 500 physicians practicing in multiple locations, the study was based on interviews, observation of workflow, analysis of department budgets, and an online survey of clinicians. The authors calculated the total costs of billing and insurance activities, taking into account salaries and benefits of staff, supplies, purchased services, and equipment.The Bottom Line Standardizing

benefit plans and billing procedures has the potential to reduce the complexity and thus the costs of billing and insurance tasks for medical

groups.

Citation

J. A. Sakowski, J. G. Kahn, R. G. Kronick et al., " Peering into the Black Box: Billing and Insurance Activities in a Medical Group, " Health Affairs Web Exclusive, May 14, 2009, w544–w554.

[Guest guest]

, you are better than PubMed. Thanks for the info!

Jack

>

> You may want to check out this article, too.

> It talks about time allocation for billing.

> No time to find a pdf.

> Good Luck.

> Locke, MD

>

>

http://www.commonwealthfund.org/Content/Publications/In-the-Literature/2009/May/\

Peering-into-the-Black-Box.aspx

>

> Peering into the Black Box: Billing and Insurance Activities in a Medical

> Group

>

> May 14, 2009

> * Authors: * A. Sakowski, Ph.D., G. Kahn, M.D., Ph.D.,

> G. Kronick, Ph.D., M. Newman, M.D., Ph.D., and Harold S. Luft, Ph.D.

>

> * Journal: * Health Affairs Web Exclusive, May 14, 2009, w544–w554

> * Contact: * A. Sakowski, Sutter Institute for Research and Education,

> sakowsj@...

> * Summary Writers: * Martha Hostetter

>

> * Health Affairs article is available at:*

> http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w544

> Synopsis

>

> A close analysis of the costs of billing and insurance tasks in a large

> medical group practice found that such tasks consume $85,276 per full-time

> equivalent physician—or 10 percent of operating revenue. Standardizing

> health plan benefits and billing procedures would reduce administrative

> complexity and costs.

> ------------------------------

>

> [image: Sakowski ITL chart]

> ------------------------------

> The Issue

>

> Health care organizations spend significant resources on the billing and

> insurance tasks required to secure payment for clinical services. Greater

> understanding of the time spent on various tasks could inform policy changes

> intended to simplify health care financing and reduce administrative costs.

> ------------------------------

> Key Findings

>

> - At one large multispecialty medical group, a total of 0.67 nonclinical

> full-time equivalent (FTE) staff worked on billing and insurance activities

> for each FTE physician.

> - Thirty-eight percent of non-clinical personnel working on billing and

> insurance activities, or 0.25 full-time employees per full-time physician,

> were performing tasks related to collecting payment, such as creating and

> filing claims, processing payments, and claim follow-up and payment

> reconciliation.

> - Physicians reported spending an average of 35 minutes per day on

> billing and insurance activities; other clinical staff spent 38 minutes per

> day on such activities.

> - In 2006, the cost of billing and insurance amounted to $85,276 per FTE

> physician—10 percent of operating revenue.

>

> ------------------------------

> Addressing the Problem

>

> [image: Sakowski ITL Pull Quote]The current multipayer financing system

> makes billing and insurance tasks complicated and costly. Automation of

> certain tasks appears to have the potential to increase efficiency by

> reducing claim denials, ensuring coding compliance, and shortening the time

> to collect accounts receivable. Policies that call for strict

> standardization of health plan features and billing procedures have the

> potential to achieve efficiencies and reduce the costs related to billing

> and insurance.

> ------------------------------

> About the Study

>

> The authors quantified the costs related to the billing and insurance

> activities undertaken at a multispecialty medical group in order to receive

> payments for clinical services. Previous work has provided national

> estimates of the time spent on such activities; this study provided detail

> on the resources required to perform specific administrative tasks. Focusing

> on a large medical group in California, with more than 500 physicians

> practicing in multiple locations, the study was based on interviews,

> observation of workflow, analysis of department budgets, and an online

> survey of clinicians. The authors calculated the total costs of billing and

> insurance activities, taking into account salaries and benefits of staff,

> supplies, purchased services, and equipment.

> ------------------------------

> The Bottom Line

>

> Standardizing benefit plans and billing procedures has the potential to

> reduce the complexity and thus the costs of billing and insurance tasks for

> medical groups.

> Citation J. A. Sakowski, J. G. Kahn, R. G. Kronick et al., " Peering into

> the Black Box: Billing and Insurance Activities in a Medical Group, " *Health

> Affairs *Web Exclusive, May 14, 2009, w544–w554.

>