Inside Health Care posts feature recent news and blog posts from the health care community and are part of the Center for Advancing Health’s portfolio of free, evidence-based coverage of what it takes to find good care and make the most of it. By Monica Kriete, CFAH Communications Associate.
Administrative costs for U.S. health care, whether measured in dollars and cents or time, are an ongoing hot topic in health care spending discussions. Recently, on the New York Times Economix blog, Uwe Reinhardt asks, “What price do we pay for pluralism in health insurance?” He notes that choosing between health insurance plans in countries like Switzerland is relatively easy because each plan is required to offer a federally specified benefits package. The diversity of American health insurance plans makes choosing between them more complicated. Comparatively, the time that prospective enrollees spend comparing options is astronomical. “Choice in the United States is expensive, because it requires prospective enrollees to do near-Talmudic studies of the fine print of each insurer’s offerings — many times multiple distinct offerings per insurer.”
Dr. Patricia Salber asks a similar question at The Doctor Weighs In: “How much are we paying for ‘choice’ of insurers?, ” citing a recent study that compared the administrative costs of practicing medicine in Canada, a single payer system, with the U.S. The researchers found that if U.S. physicians had administrative costs similar to Ontario physicians the total savings would be $27.6 billion per year. Why? Due to the extra time spent interacting with insurance companies. However, Dr. Salber writes, “The authors are careful to point out that we really don’t know the value of the benefits that may be reaped by these insurance company interactions. For example, how much inappropriate care is avoided by prior authorizations and how much innovation is stimulated by competition between the various payers?”
At least some of these administrative burdens may decrease starting in 2014, thanks to a new rule proposed by the Obama administration, Julie Rovner reports for NPR’s Shots blog. This rule could save doctors and hospitals between $3 and $4.5 billion dollars a year by standardizing how insurance companies pay electronic claims and encouraging the use of electronic claims rather than paper ones. While the rules may be costly initially for insurance companies to implement, those costs will be more than made up in savings over the next ten years, according to administration officials.
Related Links:
- What’s the Price on That MRI? Patients and the Price of Health Care – Jessie Gruman
- Health Reform Loopholes – Trudy Lieberman
- Price Tags and Haggling in an Exotic Market – Daniela Carusi
- Health Insurance, Meet the Jolly Green Giant– Trudy Lieberman
Tags: administrative costs, Economix, health affairs, health care costs, Julie Rovner, NPR’s Shots, Pat Salber, The Doctor Weighs In, Uwe Reinhardt
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