JAMA: Admin costs vary by type of visit
A new study published in JAMA digs into administrative costs connected to physician billing activities.
The researchers found that the processing time and total costs for billing and insurance-related activities varied greatly by the patient encounter and the type of doctor involved, with median costs for primary care amounting to the least and inpatient surgery the most.
The study said understanding how billing and insurance-related activities “contribute to administrative costs may help inform policy solutions to reduce these expenses.”
The study looked at a large academic healthcare system with a certified EHR system. Researchers interviewed 27 health system administrators and 34 physicians. They used data to calculate the cost for each major billing and insurance-related activity and then estimated the health system's total cost of processing an insurance claim in five patient encounters: primary care, discharged emergency department (ED) visits, general medicine inpatient stays, ambulatory surgical procedures and inpatient surgical procedures.
Average processing time and total costs for billing and insurance-related activities was 13 minutes and $20.49 for a primary care visit, 32 minutes and $61.54 for a ED visit, 73 minutes and $124.26 for a general inpatient stay, 75 minutes and $170.40 for an ambulatory surgical procedure and 100 minutes and $215.10 for an inpatient surgical procedure.
Costs for activities carried out by physicians also varied: A median of three minutes or $6.36 for a primary care visit, three minutes or $10.97 for an ED visit, five minutes or $13.29 for a general inpatient stay, 15 minutes or $51.20 for an ambulatory surgical procedure and 15 minutes or $51.20 for an inpatient surgical procedure.
Running the numbers another way, the study looked at the percentage of professional revenue that’s associated with billing costs. Those results: Billing costs represented 14.5% of professional revenue for primary care visits, 25.2% for ED visits, 8% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures and 3.1% for inpatient surgical procedures.
Administrative tasks are widely believed to be adding to healthcare costs and provider stress levels. Reducing administrative burdens isn't just about cutting workload and allowing physicians to focus more on patients’ health; this study showed it also could reduce healthcare costs.
The Trump administration’s HHS and CMS have spoken about the need to reduce regulatory burdens on providers. HHS released a report in January that said 70 healthcare regulatory actions were withdrawn in 2017. More than $3 billion was recovered through cutting waste, fraud and abuse, it contended.
Regardless of those governmental gains, if providers are going to see a real difference, billing and insurance processes will need further streamlining so physicians and their staffs can focus on improving care and patient health — and less time processing claims and billing.