The ACP Advocate Blog

by Bob Doherty

Monday, May 18, 2009

How much health care might be purchased with the $31 billion spent annually by physicians on health plan interactions?

I will be blogging this week from ACP's Leadership Day on Capitol Hill, which is ACP's annual event when internists from around the U.S. come to Washington to meet with Congress. As Congress begins to draft legislation to meet its promise to produce comprehensive health reform legislation by the August, there is no better time for internists to make their case to elected lawmakers.

One issue - which is not getting the amount of attention it should - is the enormous amount of money and time physicians spend on health plan interactions.

The issue, if it comes up at all, is usually in arguments over single payer health insurers. Single payer advocates point out, correctly, that the U.S. spends much more on health care administration than most other countries. This is a macro-level debate, though, that doesn't really tell us much about how much it costs physicians, at the micro- and practice-level, to comply with health plans' rules relating to drug formularies, pre-authorizations, retrospective review, et al. One can imagine, for instance, a U.S. style single payer plan that imposes enormous administrative costs on physician practices (think Medicare Part D).

Late last week, the health policy journal Health Affairs released a web exclusive study on what it costs physicians to interact with health insurance plans. These are among the sobering findings.

Physicians reported spending almost a half hour each day, three hours each week, and three weeks per year, interacting with health plans. Primary care physicians spend significantly more time (3.5 hours weekly) than other medical specialists (2.6 hours) or surgical specialists (2.1 hours). Clerical staff spend 7.2 hours per physician each day, for a total of 35.9 hours per week. RN/MA/LPNs employed by physicians spend 19.1 hours per physician per week.

Solo or two-person practices spend 3.5 hours weekly interacting with health plans, significantly more than practices with 10 or more physicians. Physicians spend more time dealing with formularies than any other heath plan interactions.

Translated into dollars, the authors estimate that the national time cost to practices of interactions with health plans is a stunning $23 billion to $31 billion, or $68, 274 per physician, per year. Primary care practices spend $64,859 annually per physician - "nearly one-third of the income plus benefits of the average primary care physician." They note that the "interactions that generate these costs may produce benefits as well."

Maybe so, but the study doesn't address a key policy question: how much health care could be bought if the U.S. were to reduce the amount of time and money that physicians and their staff spend on health plan interactions? Let's say for discussion purposes we could cut in half the average of $68,000 annually and 3.5 hours per week that physicians spend on health plan interactions (even leaving out, for now, the time that their employees spend on these tasks)?

This could be enough to pay the annual health premiums for three families, multiplied by every practicing physician in the U.S, based on average premium cost of $12,000 per family. It would allow each primary care physician to see another four or five patients per week, thereby reducing wait times and easing the primary care shortage. It would increase primary care physicians' incomes by an equivalent of $32,000 per year - more than many of the ideas for increasing primary care pay being considered by Congress.

It would reduce one of the chief frustrations of primary care physicians, which gets communicated down to young people as a reason to stay away from the field. As Star Trek's iconic Dr. "Bones" McCoy might have said, "I'm a doctor, not a paper-pusher!"

Yet I think there is a real risk that Congress not only won't reduce the paperwork on doctors, but add more pre-authorizations and medical review requirements, all in the name of cutting costs.

Today's questions: Does the Health Affairs study accurately reflect your experiences with health plan interactions? What would you recommend be done to lower the costs of health plan interactions, and prevent Congress from adding new ones?

1 Comments :

Blogger Paula said...

I think that the estimate of 3.5 hours per week for the time that internist spend on paperwork is extrememly low. As a matter of fact, I think that I spend 3.5 hour per day on paperwork!

May 29, 2009 at 6:14 PM  

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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