BETHESDA, MD – Even physicians who use EMR systems and other information technology are experiencing high costs in serving multiple-patient health plans, according to a new study.
Co-funded by the Commonwealth Fund and the Robert Wood Johnson Foundation’s Changes in Health Care Financing and Organization (HCFO) Initiative, the study concluded that in one instance, 10 percent of a multi-office California practice's operating revenues went to billing and insurance activities.
“We believe that while minimizing billing and insurance-related administration activities is not the only goal of the healthcare system reform, standardizing health plan features and processing requirements presents a tremendous opportunity for improving efficiency in a multi-payer health care system,” said lead study author Julie Sakowski, PhD, a senior health services researcher at the Sutter Health Institute for Research and Education in California.
The study, conducted over a three-year period starting in 2006, estimated the number of full-time equivalent (FTE) non-clinical personnel dedicated to billing and insurance per physician and the percentage of total operating revenue spent on FTE physicians engaging in billing and insurance activities.
Methods used to collect data included interviews with business office informants, work flow observation and budget and expense reviews, as well as an online survey collecting clinician efforts dedicated to billing and insurance.
Cost calculations for the study included salary and benefits information, supplies, purchased services and equipment. Healthcare information technology costs were allocated to billing and insurance based on maintaining programs, forms and databases.
The results of the study showed approximately 0.67 FTE non-clinical personnel dedicated to billing and insurance per FTE physician. This includes full-time billing personnel and those with other responsibilities.
Total operating costs of billing and insurance activities by non-clinical personnel was $51,221 per FTE physician with 70 percent spent on salary, 20 percent on purchased services and 10 percent on the purchase and operation of IT.
In comparison, the value of clinician time spent on billing and insurance was $34,052 per FTE physician, bringing the total amount of operating revenue spent to $85,273, equalling 10 percent of total operating revenue.
The authors of the study noted that even with an EMR the practice uses for billing along with its extensive automation, the complexity of serving patients covered by a number of differing health plans greatly adds to the administrative workload and cost of care.
