National Public Radio’s latest story in its series on health care details a family doctor’s plight against insurance companies.
Because insurance companies watch costs aggressively, Jaffe says she has to
fight to get her patients the care they need. On two occasions, insurers told
her they would pay less for an immunization than it would cost her to buy the
vaccine, let alone administer it.
…Jaffe says she wishes she could be practicing medicine, rather than
searching for ways to pay for it. At the end of the day, once her patients have
gone home, she is left with mounds of paperwork.
…Jaffe says that the time that she spends on paperwork is time that could
have been spent with patients.
The Wall Street Journal last month went into more detail in this article, explaining how doctors are spending lots of time and money to recover money that insurers are denying. (WSJ requires a subscription, but I can send you a copy of the article if you email me at firstname.lastname@example.org).
Doctors increasingly complain that the insurance industry uses complex, opaque
claims systems to confound their efforts to get paid fairly for their work.
Insurers say their systems are designed to counter unnecessary charges and help
keep down soaring health-care costs. Like many tug-of-wars over the health-care
money pot, the tension has spawned a booming industry of intermediaries.
It’s called “denial management.” Doctors, clinics and hospitals are
investing in software systems costing them each hundreds of thousands of dollars
to help them navigate insurers’ systems and head off denials.
The imbroglio is costing medical providers and insurers around $20 billion
— about $10 billion for each side — in unnecessary administrative
expenses, according to a 2004 report by the Center for Information
Technology Leadership, a nonprofit health-technology research group based in
Boston. (Emphasis mine)
The upshot of these two stories: that administrative hassles with insurance companies all come at a cost. For a small one-doctor clinic, with limited administrative staff, like Rebecca Jaffe in the NPR story — it means patients will get worse care — or less care. For the larger physician group, like the ones in the WSJ story, it means more money that could either be dedicated to patient care or costs that wouldn’t eventually be billed to patients.
Combine the administrative costs of providers with the 30% administrative costs of insurance companies (as this article revealed) and we find consumers paying more money — and getting less health care.
These administrative fights weigh heavily on the consumers. If the energy dedicated to denying and recovering costs could be redirected to providing health care, we might have a few million more people with health coverage.