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Administrative Costs Estimated at Health Care System

TUESDAY, Feb. 20, 2018 -- The estimated costs of billing range from $20 for a primary care visit to $215 for an inpatient surgical procedure, according to a study published in the Feb. 20 issue of the Journal of the American Medical Association.

Phillip Tseng, from the Duke University School of Medicine in Durham, N.C., and colleagues estimated the administrative costs associated with physician billing in a large academic health care system using data from interviews conducted with 27 health system administrators and 34 physicians in 2016 and 2017.

The researchers found that the estimated processing time and total costs for billing and insurance-related activities were 13 minutes and $20.49, 32 minutes and $61.54, 73 minutes and $124.26, 75 minutes and $170.40, and 100 minutes and $215.10 for a primary care visit, a discharged emergency department visit, a general inpatient stay, an ambulatory surgical procedure, and an inpatient surgical procedure, respectively. The corresponding time and costs for activities carried out by physicians were estimated at a median of three minutes or $6.36, three minutes or $10.97, five minutes or $13.29, 15 minutes or $51.20, and 15 minutes or $51.20. Professional billing costs were estimated to represent 14.5, 25.2, 8.0, 13.4, and 3.1 percent of professional revenue, respectively, for the five patient encounters.

"Knowledge of how specific billing and insurance-related activities contribute to administrative costs may help inform policy solutions to reduce these expense," the authors write.

Two authors disclosed financial ties to the pharmaceutical and health care industries.

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Posted: February 2018

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