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Publication Date: 
August 9, 2011

Report Finds U.S. Doctors Spend Four Times as Much Money as Canadian Doctors Interacting with Payers

U.S. physician practices spend nearly four times as much money interacting with health plans and payers than do their Canadian counterparts, finds a new study published in this month’s Health Affairs. U.S. physician practices, especially those with just one or two physicians, incur substantial labor costs interacting with multiple insurance plans about claims, coverage and billing for patient care and prescription drugs. The paper was funded by the Robert Wood Johnson Foundation’s Changes in Health Care Financing and Organization initiative.

The report’s authors surveyed physicians and administrators in the province of Ontario, Canada, about time spent interacting with payers, then compared the results with a national companion survey conducted in the United States. The authors estimate that physician practices in Ontario spent $22,205 per physician per year interacting with Canada’s single-payer agency—just 27 percent of the $82,975 per physician per year spent in the U.S interacting with payers. If administrative costs were similar in the U.S. and Canada, the total savings in the U.S. would be approximately $27.6 billion annually. The difference in time devoted to such interactions is even more striking among nursing staff, with those in the U.S. spending nearly 10 times the number of hours per week as their Canadian counterparts interacting with payers.

The results support the general broad consensus shared by many U.S. health care leaders that interactions between physician practices and health plans could be performed much more efficiently.

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