Administrative Costs For US Doctors Four Times Higher Than In Canada

Conservatives frequently blame costs associated with malpractice (including defensive medicine) for the growing cost of medical care in this country. While these are real costs which should have been addressed in the Affordable Care Act, there are two other costs to physicians which impact practice  the cost of providing medical care more than the cost of malpractice insurance. One is costs due to unreimbursed services involving patients without health care insurance. This problem should become minimal once we approach universal coverage but another problem will persist–the cost of dealing with multiple payers.

Health Affairs compared the overhead of physicians in the United States with those in Ontario where there is a single-payer system:

We estimated physician practices in Ontario spent $22,205 per physician per year interacting with Canada’s single-payer agency—just 27 percent of the $82,975 per physician per year spent in the United States. US nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans—nearly ten times that of their Ontario counterparts. If US physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year.

This cost added cost for dealing with multiple payers is over six times the cost of my malpractice premiums. While we should take advantages of saving money from malpractice reform, there are other changes in our health care system which could save far more.  Higher expenses such as these administrative costs also show why trying to cut reimbursement for medical care to that of other countries is not possible.

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7 Comments

  1. 1
    Lee Meade says:

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  2. 2
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  7. 7
    John Chase Maxwell says:

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