Health & Spirit

Health care billing process is costly and inefficient, study concludes

Karen Kaplan, Los Angeles Times on

Published in Health & Fitness

Health care in the United States is really expensive, and one of the reasons is that managing health care bills is really, really expensive.

Just how expensive? At one large academic medical center, the cost of collecting payments for a single primary care doctor is upward of $99,000 a year.

And billing for primary care visits is a bargain compared with billing for trips to the emergency room, a hospital stay or a surgical procedure, according to a report published Tuesday in the Journal of the American Medical Association.

Researchers from Duke University and Harvard Business School figured this out by reconstructing the entire life cycle of a medical bill -- from the time a patient makes an appointment until the time the health system pockets the money for the services rendered. They applied their analysis to five types of "patient encounters," as they put it.

Members of the research team conducted 27 interviews with people involved at various points in the billing process to understand every single step along the way. They also surveyed 34 doctors to understand their billing-related activities, such as submitting prior authorization requests to health insurance companies.

Once they had mapped out the entire billing process, they used salary information from the medical center to determine the cost of carrying out each step. They also added in overhead costs such as office equipment and utility bills.


These were the results:

-- It cost $20.49 to get paid for a typical primary care visit, and took 13 minutes of processing time.

-- It cost $61.54 to get paid for a typical trip to the emergency room, and took 32 minutes of processing time.

-- It cost $124.26 to get paid for a typical hospital stay, and took 73 minutes of processing time.


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