OT: US docs spend 4X more in administrative costs than Canadian docs

Here’s an interesting study, courtesy of Medscape. I’ve edited it for brevity.

According to a study published in the online journal Health Affairs, American physicians spend almost 4 times as much on administrative costs related to dealing with insurance plans, compared to physicians in Canada.

According to the research, the staff time to deal with multiple health plans about claims, prior authorizations, and so forth is estimated to cost at least $82,975 per physician per year in the United States, versus $22,205 in Ontario. The study, from the University of Toronto, was partially funded by The Commonwealth Fund, which is pro-single-payer systems.

If the typical administrative costs could be made equal to those in Ontario, potential savings in the U.S. would be about $27.6 billion per year.

American physician practices interact with multiple health plans, with different insurance products, each with its own arcane policies for prior authorization, billing, submitting claims, and determining payment. Canadian physicians work with a single payer with a single set of rules.

Here are some other interesting comparisons:
– Nurses and medical assistants spend 20.6 hours per physician per week on administrative tasks, nearly 10 times the time spent by Canadian practices. The main reason: obtaining “prior authorization”.
– US clerical staffs spend 53.1 hours per physician per week on administrative tasks related to insurance, compared with 15.9 hours in Ontario.
– Senior administrators of US physician practices spend 163.2 hours a year overseeing claims and billing, compared with 24.6 hours a year in Ontario.

As you can see, dealing with insurance plans is a full-time job.

The Canadian system certainly isn’t perfect – waiting lists are common in Canada. Currently, the average wait time between referral from a GP to a specialist for non-emergency conditions is 18 weeks. Canadians typically wait 4.2 weeks for a CT scan, and nearly 10 weeks for an MRI. But of course, there are no co-pays or deductibles. And you can use the insurance plan no matter where you move in Canada, and you don’t lose coverage if you become unemployed. Canadians also pay higher taxes.

While I don’t think the Canadian healthcare system could work here in the U.S. for multiple reasons, this study certainly gives the U.S. system a measuring stick to use in order to reduce the amount of needless bureaucracy that has developed here. Food for thought.


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