News: Roughly 25% of healthcare money used for the billing process, JAMA study finds

While increased services certainly increases the price of healthcare, but a recent study published by the Journal of the American Medical Association (JAMA) found that roughly 25% of healthcare dollars are used for the administrative billing process, not patient care. 

The study traced the administrative costs of an academic medical center as the bill went through the entire revenue cycle management process for different patient encounters, according to FierceHealthcare.

The study found that the processing time and total costs for billing and insurance-related activities were:

• 13 minutes and $20.49 for a primary care visit
• 32 minutes and $61.54 for a discharged ED visit
• 73 minutes and $124.26 for a general inpatient stay 
• 75 minutes and $170.40 for an ambulatory surgical procedure
• 100 minutes and $215.10 for an inpatient surgical procedure

Those numbers mean that costs associated with billing activities performed by physicians represented, as a proportion of professional revenue, 14.5% for primary care visits, 25.2% for ED visits, 8.0% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures, and 3.1% for inpatient surgical procedures.

“This study suggests that, if anything, administrative time needed for billing has increased for physicians and other staff as EHRs have become more widespread,” wrote Vivian Lee, MD, PhD, of the University of Utah and the Institute for Healthcare Improvement, and Bonnie Blanchfield, of the division of general internal medicine at Brigham and Women’s Hospital in Boston, in the accompanying editorial. 

The study did not include time and money spent on the insurance company’s end while processing the claims or the cost of implementing an EHR system in the first place, according to FierceHealthcare.

Editor’s note: To read the study published by JAMA, click here. To read FierceHealthcare’s coverage of this study, click here. To read the accompanying editorial from JAMA, click here. To read about the costs of fighting denials and working with insurance companies to right the ship, click here.