Health Insurance Administrative Costs to Doctors = $31 Billion Per Year
Filed under: Health Benefit Costs, Health Care Plans, Insurance Companies, Primary Physician
Back in January, in a post titled Health Care and Productivity, a National Cost, I had occasion to write a line or two about the affect of insurance paperwork upon my family physician, whom I had just seen. I ventured then in a roughshod way (I was sick), that such would impact his productivity, and consequently that of the nation:
…if my family physician and his staff of two are grudgingly forced to devote numerous hours to a maddening array of paperwork and phone calls (“it gets worse every year”) in an attempt to navigate the various streams of insurance authorizations and payments (“some of it seems designed solely to frustrate and slow or prevent payment”) -he will not be seeing patients. Tomorrow, he will not be seeing patients; he will be trying to catch up on paperwork–as will his staff.
Perhaps then, when we consider that Health Care costs amount to 16% of the GDP, we might also consider that this number does not take into account the difficult to gauge loss of national productivity. And although the sickness of one can be the work of another, the exchange does not seem to be an even one as it relates to national production: the doctor functioning, in a sense, as a support and enabler to the productivity of others. Having said that, if that doctor is unavailable (through lack of insurance or remoteness) to remedy the ills of the now unproductive (or the less productive) the nation suffers for it. If the doctor is needlessly enmeshed in tasks, inefficient and ancillary to patient treatment, the nation suffers for it.
A portion of the suffering has been gauged: 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, gives us numbers–and they agree with my doctor.
Key Findings
- Physicians, on average, spent 142.3 hours per year interacting with health plans, or 3.0 hours per week and 2.7 physician work weeks per year. Primary care physicians spent significantly more time (164.9 hours per year) than medical specialists (123.7 hours) or surgical specialists (100.3 hours).
- Nursing staff spent an additional 23 weeks per year per physician interacting with health plans, while clerical staff spent 44 weeks and senior administrators spent 2.6 weeks doing so.
- Compared with other interactions, physicians, on average, spent more time dealing with formularies (78.2 hours for primary care doctors, for example), and the least on submitting or reviewing health plan quality data (1.9 hours annually 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.
The authors further note that “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. That is six times the amount the federal government spends annually on the Children’s Health Insurance Program (CHIP).”
The study also notes that “Primary care physicians, especially those in small practices, spend larger amounts of time interacting with plans than those in other specialties.”
My physician and his staff of two devote an entire day every two weeks, and his staff devotes a great deal of the time in between to this “maddening array of paperwork and phone calls (‘it gets worse every year’) in an attempt to navigate the various streams of insurance authorizations and payments” –some of which “seems designed solely to frustrate and slow or prevent payment.” The study estimates that expense for a primary care physician (though more for those “in small practices”) at $64,859 annually.
For more details you can read a brief Commonwealth Fund article on the report here
or the Health Affairs article with the report here.
Clinic Expansion Under Bush Thought Likely to Continue Under Obama
Filed under: Community Health Centers, Health Care Clinics, Physician Compensation, Primary Physician
The NY Times reports that “President Bush leaves office with a health care legacy in bricks and mortar: he has doubled federal financing for community health centers, enabling the creation or expansion of 1,297 clinics in medically underserved areas.”
The article notes that:
“As a crucial component of the health safety net, they [community health centers] are lauded as a cost-effective alternative to hospital emergency rooms, where the uninsured and underinsured often seek care,”
and that
“Studies have generally shown that the health centers — which must be governed by patient-dominated boards — are effective at reducing racial and ethnic disparities in medical treatment and save substantial sums by keeping patients out of hospitals. Their trade association estimates that they save the health care system $17.6 billion a year, and that an equivalent amount could be saved if avoidable emergency room visits were diverted to clinics.”
As an example, the Times article cited Nashville’s United Neighborhood Health Services, a recipient of increased funding which has expanded more than two-fold in the last 8 years. The Times notes that “One of the group’s recent grants helped open the Southside Family Clinic, which moved last year from a pair of public housing apartments to a gleaming new building on a once derelict corner.” A 68 year old patient of that clinic who had just received breathing treatments, “said she would have sought care for her bronchitis in a hospital emergency room were it not for the new clinic. Instead, she took a short drive, waited 15 minutes without an appointment and left without paying a dime; the clinic would bill her later for her Medicare co-payment of $18.88.”
The article also states that “Despite the clinics’ unprecedented growth, wide swaths of the country remain without access to affordable primary care. The recession has only magnified the need as hundreds of thousands of Americans have lost their employer-sponsored health insurance along with their jobs.”
Widespread Support for Community Health Centers
The Times notes that “In response, Democrats on Capitol Hill are proposing even more significant increases, making the centers a likely feature of any health care deal struck by Congress and the Obama administration.”
In August, President-elect Obama sponsored a bill in the Senate “that would quadruple federal spending on the program – to $8 billion from $2.1 billion — and increase incentives for medical students to choose primary care. His wife, Michelle, worked closely with health centers in Chicago as vice president for community and external relations at the University of Chicago Medical Center.”
In his recent book on health care reform, HHS secretary Tom Daschle referred to the health centers as “godsends.” The Times article also notes that the federal program “was first championed by Senator Edward M. Kennedy” and “has earned considerable bipartisan support.”
Physician Compensation, Subsidies and Service Requirements
The article notes that with United Neighborhood Health Services starting pay for doctors is $120,000. “Because of a nationwide shortage of primary care physicians, the clinics rely on federal programs like the National Health Service Corps that entice medical students with grants and loan write-offs in exchange for agreements to practice as generalists in underserved areas. Of the 16 doctors working for United Neighborhood, seven are current or former participants.”
Follow-up Care Lacking
Although widely lauded as a viable solution to Primary Care medical delivery, the article notes that follow-up for more serious conditions can be problematic.
“A deeper frustration for health centers concerns their difficulty in securing follow-up appointments with specialists for patients who are uninsured or have Medicaid. All too often, said Ms. Bufwack [Chief Executive, United Neighborhood Health Services], medical care ends at the clinic door, reinforcing the need to expand both primary care and health insurance coverage. ‘That’s when our doctors feel they’re practicing third world medicine,’ she said. ‘You will die if you have cancer or a heart condition or bad asthma or horrible diabetes. If you need a specialist and specialty tests and specialty meds and specialty surgery, those things are totally out of your reach.’”
Read full NYT article here. Read WSJ Health Blog report here.
Doctors and Debt
Filed under: Education Costs, Physician Compensation, Primary Physician, Primary Physician Shortage
An article in the NY Times reports that The New England Journal of Medicine has said that “Almost one-quarter of U.S. medical students now graduate from medical school with $200,000 or more in debt, an expense that limits entry to the profession.”
A graph which tracks various educational costs and doctor compensation in relation to the CPI over the last 10 years accompanies the article.
Of particular note, Over the last 10 years:
The CPI has risen slightly more than 30%
The cost of:
Public 4-year undergraduate tuition has risen over 100%
Private 4-year undergraduate tuition has risen over 70%
Public “in state” med school tuition has risen over 100%
Public “out of state” med school tuition has risen 70%
Private “in state” med school tuition has risen 50%
Private “out of state” med school tuition has risen roughly 45%
The median compensation for:
All medical specialists has risen roughly 42.5%
Primary care physicians has risen roughly 30%
The median compensation for primary care physicians has risen slightly less than the CPI.
In a recent post, we noted that the AMA has predicted a future shortage of 35,000 to 40,000 primary care physicians. See full NY Times article and graph here.
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