james Surowiecki has a nice interview with David Cutler at his site. Cutler is the Harvard health care economist who has ben an influential writer on health care reform. He is quite optimistic about the bill, but then he had some influence in the ideas that went into it.
In this interview he notes that our administrative costs are higher than those elsewhere in the world. As an example he uses Duke University Hospital. With 900 beds, they have 1300 billing clerks. Duke, like most universities, employs most of its physicians, so these clerks, one presumes, are billing for the hospital and its physicians. Still, that is a lot of people involved in billing, and it is just on the provider side. Why so many? Based on my experience, billing is not at all uniform. Every insurance company has different forms and different rules. They have an interest in avoiding payment. Much of the time of our billers is spent in follow up. Finding out why we have not received payment. Sometimes it is an honest error. often our people have made a minor mistake. Sometimes the insurance company then returns the bill, but not uncommonly they wait until we do a follow up to find out what was wrong.
Compare this with Taiwan, which devotes 2% of its health expenditures to administrative costs with its insurance. Compare it to France where the physician just runs your smart card through his reader. No need for billing clerks. We have a lot of room to save money here. Uniform billing forms and requirements would be a start.
Yes!! This is one of the reasons that changing the way health care is paid for will reduce costs. Making sure that everyone has health care is a worthy goal, but radically changing the say that it is done definitely would have positive implications for cost reductions. It will be interesting to see how this is handled with the health care bill since obviously you are not the only one to have noticed that administration is a major cost. A single payer would do this.