Synopsis
A 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.



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The Issue
Administrative 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 Findings

Physicians, 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.

Am I doing the math correctly in that physicians are worth $500/hr?

...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.

physician practices= the whole staff. so your billing clerk and the people you hire SPECIFICALLY TO DO THAT TASK

going to go out on a limb and say "Duh"

physician practices= the whole staff. so your billing clerk and the people you hire SPECIFICALLY TO DO THAT TASK

going to go out on a limb and say "Duh"

The study is merely to point out how large the expense is as a line item. What other industry loses that much money to simply trying to get their money?

Most companies spend time and money trying to collect money. The question to be asked that was not examined in the parts of the study I read from the link, is how does that cost compare to the typical cost of collecting money due. My firm does not deal with HMOs or other insurance companies for payment (99% of the time), but we still incur large annual costs just to collect the money we earned for providing our services.

I would of course assume it takes more time if for no other reason than because of the documentation required by the insurance companies to validate the claim, but I would be curious to see what that the difference would be, and I question whether the cost is that much more than the difference between other professions billing private clients versus government clients. Bureaucracy breeds paperwork.

I would estimate most physicisians take home 150k-200k for family care (though thats an educated guess based on being the child of a physcisian)

I wish... :-p

Internists in particular appear to be dissatisfied with their incomes, suggesting that they may be open to practice opportunities offering a high level of income potential. Over one-third of physicians surveyed said they earn $125,000 or less a year, well below the average income offers we see for family physicians, internists, and pediatricians.

I just want to bea ble to pay my everyday doc cash. But the state does everything it can to make the system make as hard as it can to do this.