THE COST OF HEALTH CARE


Originally posted on April 8, 2018

I recently came across an interesting article in the February edition of the Journal of the American Medical Association (JAMA) discussing the medical cost associated with billing insurance. Several comments stood out in the article.
 
First, in the United States the cost of billing for primary care services is nearly 4 times the cost it is in Canada. Electronic medical record (EMR) systems, with their own expense to a medical practice, were designed to help streamline the billing and coding process thereby decreasing the amount of time and money associated with billing. Unfortunately, this study shows that EMRs are not saving time or money.
 
The study was conducted in North Carolina at an academic health care system. The findings suggested that for every primary care visit, $20 of each claim was just to cover insurance-related activities, not the actual care delivered. According to the study, that equates to approximately 14.5% of the annual revenue of a practice. For each claim, 13 minutes were spent just to get the bill going. Forty-two percent of the cost in the “labor category” was spent on overhead, support, and supervisory roles while just 57% was the cost for delivering the actual care. For every primary care visit, over 40% of the cost doesn’t come from anyone delivering care to you!! And this is just in primary care. In other areas of medicine, billing costs were even higher.
 
In a separate JAMA editorial (March 13, 2018, vol. 319, no. 10) by Ezekiel Emanuel, the author examines why costs to deliver care in the US is so much greater than those of other nations. He tallies four main drivers of cost: drug prices, “high-margin, high-volume” procedures, imaging costs and frequency of use, and finally administrative costs. Our country spends more money on pharmaceuticals per capita than anyone else… by a long shot. We do more procedures at a higher cost than others. We do more CT scans than any other nation and are second in MRI scanning at costs up to four times that of other countries. In the US, administrative costs account for “12.9% of the per capita cost difference and are 3 times greater than that of Germany and almost 6 times higher than that of Sweden” (pg. 983-4). Just to generate a bill.
  
Policy makers are aware of these main cost drivers, but little is being done to curb the insatiable spending on health care. For every $5 in GDP, almost $1 is spent on healthcare. This cost burden limits our ability as a country to develop in other sectors such as business, infrastructure, military, and early education to name a few. Our ability to control health care costs is imperative for our country to grow and remain strong. As citizens we need to urge our lawmakers and providers to do their job in addressing these costs that are holding the growth of our nation back. Ralph Waldo Emerson once said, “your actions speak so loudly, I can not hear what you say”. Let’s start acting with our votes and our wallet and let the people who are building castles off your health care dollar know that you are ready for change.

 
– Josh Smith, FNP
 
Source: Journal of the American Medical Association (JAMA) and it
was in the February 20th edition, volume 319, number 7
Author
Josh Smith, FNP

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