Monday, September 5, 2011

KISS! (Keep It Simple, Stupid)

We often wonder why health care in the United States is so much more expensive than in other countries.  A large part of the answer is that administrative costs in the US system are far higher than in other countries.

A survey of physicians and their staff found that the administrative costs of and time spent interacting with multiple payers in the United States far exceeded time spent and costs in Canada with its single-payer system.

Specifically, U.S. physicians typically spent $82,975 a year administering claims to insurers. In Canada, where health providers only have to deal with one payer - the government - they spent $22,205.

One reason I can see for this discrepancy is that there is very little standardization among our payers. Sure, they all have to use the same codes for procedures (CPTs) and diagnoses (ICD), but from there, the similarity in how a claim is handled disappears. Each insurer has different rules about what diagnosis can be linked to what procedure, what fields on a claim form must be completed or left blank; even the Explanation of Benefits are all different so it's hard to zip through them when processing payments. Each provider is paid differently, according to whatever fee schedule they have negotiated with the insurer. I get bulletins from all our insurers periodically (we accept almost every insurance out there) with "edits" to how claims should be submitted. Do I have time to read all of them? Never. There is a whole industry out there for medical coders to learn the ins and outs of how to successfully code a claim because of all the mystery and confusion.

Another reason is that the rules and regulations governing health care billing and payment are extremely complex and cumbersome.  For any office visit, hospital charge, or other simple service, there are multiple sets of codes, complicated documentation rules, and multiple decision points.  Furthermore, many bills are divided into an upfront co-pay, an amount that the insurer pays, and then a third amount, to cover the difference between the allowable charge, and the amount that has been paid between the co-pay and the insurance payment.  Sound complicated?  It is, and this complexity is the cornerstone of a huge bureaucracy necessary to administer its ins and outs.  It is also the foundation of a great deal of health care fraud, which can hide for years behind the tangle of complicated rules.

Even within a payer, things get tricky. I'm sure you're all tired of hearing me wail about Carefirst of Maryland, but it really is the bane of my existence. Almost all of our Blue Cross/Blue Shield claims must go through Carefirst of Maryland.  The rules are not always the same for all of those BC/BS claims, so there are problems. However, I can't call a patient's "Home plan" to get answers: I must call Carefirst of Maryland, who then "wires" the home plan for a resolution -- that can take literally months.

The time I spend figuring out why a claim isn't paid very often cancels out the amount we end up getting.  That $82,975 figure is very easy for me to believe; actually, I'm surprised it's not higher.

And those who shiver when they think about the government telling doctors how to do their jobs? Guess what. Private insurers tell providers how to do their jobs every day. Would you rather a profiteer be deciding on your health, or the government?

Are you a citizen who thinks that health care costs are too high in the United States? This is one of the reasons, my friend. If your doctor has to pay $82,000 a year to deal with insurance companies, who do you think the cost is getting passed on to?

It is obvious to us that a simplified billing system, with standardization across the board and streamlined billing and payment rules and regulations would be the key to better and less expensive health care.

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