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U.S. Docs Outspend Ontario Physicians

MANAGED CARE September 2011. © MediMedia USA
News and Commentary

U.S. Docs Outspend Ontario Physicians

MANAGED CARE September 2011. ©MediMedia USA

Call it the nature of the fragmented U.S. health care system — U.S. physicians spend nearly four times as much money interacting with insurers and health plans than their counterparts north of the border, according to a survey from the Commonwealth Fund published in Health Affairs.

Those administrative costs amount to $82,975 per physician per year, compared to just $22,205 in Ontario. The survey says that if U.S. physicians could bring their administrative costs more in line with physicians in Ontario, their total savings would be about $27.6 billion per year.

The researchers found, after speaking with U.S. and Canadian physician leaders and administrators, widespread agreement that “interactions between practices and health plans in the United States could be performed much more efficiently, reducing costs for both physicians and plans alike.”

The survey cites examples like standardizing transactions or conducting them electronically as potential cost-saving strategies. In addition, the survey notes provisions in the Accountable Care Act — notably “the adoption of new payment methods, like bundled payment, and new ways for organizing health care delivery, like accountable care organizations, which could reduce administrative costs in the long term.”

By estimating the cost to Canadian practices of interacting with a single payer, then comparing the cost to a multiple-payer system, the researchers provided an estimate of the “extra” costs to U.S. physicians.

The researchers note the difficulty of estimating differences across costs and benefits in a single- versus multiple-payer system, so their study was focused on a more modest goal: to directly compare administrative costs of interacting with payers by office-based doctors using a similar survey tool in Cananda and the United States.