Streamlined MD Billing Could Save BILLIONS

The United States' "system" for billing health insurers for physician services is complex, expensive and inefficient.  Anyone who has spent time handling healthcare claims knows this.  

A study published April 29, in the journal Health Affairs, entitled "Saving Billions of Dollars -- And Physicians' Time -- By Streamlining Billing Practices asserts physicians spend 12 percent of net patient service revenue on billing and its excessive administrative complexity.  More importantly, four hours of professional time per physician and five hours of practice support time each week could be saved. 

These savings in professional time, if realized, will be the equivalent of an increase in the supply of physicians of between five and 10 percent, and would provide a material increase in professional productivity.

The U.S. system of billing third parties for health care services is complex, expensive, and inefficient. Physicians end up usingnearly 12 percent of their net patient service revenue to cover the costs of excessive administrative complexity. A single transparent set of payment rules for multiple payers, a single claim form, and standard rules of submission, among other innovations, would reduce the burden on the billing offices of physician organizations. On a national scale, our hypothetical modeling of these changes would translate into $7 billion of savings annually for physician and clinical services. Four hours of professional time per physician and five hours of practice support staff time could be saved each week.

The Patient Protection and Affordable Care Act will required health plans to adopt and implement uniform standards for the electronic exchange of health information to reduce paperwork and administrative costs.  But, the study points out that the health reform law will not address the larger problems of "excessive, different and changing requirements imposed on the exchange of all health information, including billing information."  

As anyone who has had experience dealing with hundreds of third party claims administrators and health insurers knows, there is much more work to be done.  But the $7 billion prize, and the windfall of additional physician time, make the effort worthwhile.  It will take Federal leadership, however, to bring together the disparate interests that perpetuate the status quo.