Even with streamlined systems, they can account for 25 percent of overall cost of service, says Duke-Harvard research
Newswire: Feb. 20, 2018.
Billing and administrative costs form an enormous portion of the cost of medical care provided, even with streamlined electronic health records management in place, according to a study published this week in the Journal of the American Medical Association.
In the study, which examined an unnamed institution that had optimized “all its bill-paying functions within a single dedicated unit,” according to a Harvard researcher, administrative costs accounted for at least a quarter of total health care spending in the United States. That was more than double than what counterparts in Canada and other wealthy nations paid.
In anecdotal, whole dollar terms, it accounted for $20 for a primary care visit — roughly the same as a typical co-payment with health insurance — or $215 for inpatient surgery.
Harvard Business School’s Robert S. Kaplan, a co-author of the study (in partnership with Duke University) said that “The high costs were not caused by wasteful, inefficient processes, duplicate or redundant tasks, or the inappropriate use of high-wage personnel to perform low-skilled tasks.”
The data pose a significant counterargument to the belief that electronic health record systems, pushed since 2009 by the federal government, would reduce administrative costs for physicians and medical practices while benefitting patients through the portability and accessibility of their records.
“To a large degree, the significant administrative costs measured in this study are the consequences of heterogeneous payment requirements across the multiple payers and health plans contracting with the academic health center,” said Barak Richman, another researcher with Duke’s School of Law and the Duke-Margolis Center for Health Policy. “We need to understand better how complexity is driving these enormous costs within the system, costs that do not add value to patients, employers, or providers.”
Increasingly, U.S. physicians are growing weary of electronic health records management and their requirements. Surveys of medical professionals have blamed EHR for taking away time from physician-patient interaction and contributing to professional turnover and burnout.
“We hope that this work is the first step toward informing policy solutions that could reduce these non-value-added costs largely hidden within the health care system,” said Kevin Schulman, one of the study’s authors.
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