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Physician practice interactions with health plans cost $31 billion a year
Date:5/14/2009

Bethesda, MDAs policymakers consider ways to cut health costs as a part of health reform, a new national survey of physician practices finds that physicians on average are spending the equivalent of three work weeks annually on administrative tasks required by health plans. According to the study by Lawrence P. Casalino, M.D., Ph.D., of Weill Cornell Medical College and colleagues, physician practices report that overall the costs of interacting with insurance plans is $31 billion annually and 6.9 percent of all U.S. expenditures for physician and clinical services. The study, published in today's online issue of Health Affairs, was co-funded by The Commonwealth Fund and the Robert Wood Johnson Foundation's Changes in Health Care Financing and Organization (HCFO) Initiative.

The survey of physician practices across the U.S. inquired about time spent by all practice staff on specific activities, including prior authorization, pharmaceutical formularies, claims and billing, credentialing, contracting, and collecting and reporting quality data. This national survey is the first to ask directly about time spent by non-physician staff on interaction with health plans, and the first to provide data by the type of interaction, type of staff, specialty, and practice size.

On average, physicians spent three hours a week or nearly three weeks per year on these activities, while nursing staff spent more than 23 weeks per physician per year, and clerical staff spent 44 weeks per physician per year interacting with health plans. More than three in four respondents said the costs of interacting with health plans have increased over the past two years.

"While there are benefits to physician offices' interactions with health plans which may, for example, help to reduce unnecessary care or the inappropriate use of medication it would be useful to explore the extent to which these benefits are large enough to justify spending three weeks an
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Contact: Mary Mahon
mm@cmwf.org
212-606-3853
Commonwealth Fund
Source:Eurekalert

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