HIT Must Reduce Physicians' Hassles With Insurers

I wrote recently about a report in Health Affairs that claims the nation's physicians and their staffs average three hours a week haggling with health insurance companies over claims, credentialing, authorizations, and formularies.

According to the report, The Costs to Physician Practices of Interactions with Health Insurance Plans, total staff interaction time with insurance companies system-wide converted to dollars equaled $21 billion to $31 billion annually—an average of more than $68,000 per physician per year. The report didn't provide a further breakdown about how much time was spent negotiating with private plans, and how much was spent with public plans such as Medicare/Medicaid.

I asked America's Health Insurance Plans about the report and whether they felt the cost estimates were in the ballpark. They couldn't say either way, because they hadn't seen the report in detail, nor the methodology. Fair enough. They said they'd look at it and get back to me.

Some readers who work in physicians' offices have e-mailed me to say that health insurance companies intentionally make the process difficult for providers with the hope that they will give up on contentious claims. I'm not saying that. Some people are.

For argument's sake, let's say the Health Affairs study numbers are inflated. Let's say the cost is "only" $10 billion to $15 billion a year. That's still a tremendous amount of money, representing a tremendous waste of time.

The wasted time spent haggling is a bigger problem for primary care physicians than for their subspecialist colleagues. That's not surprising because primary care physicians generally have a more diverse patient mix, and contract with more insurers—each insurer offering any number of plan options with different deductibles, copays, formularies, etc. —to cover that mix. A primary care physician and her staff may have to be well-versed in the subtleties of 20 or more varying public and private plans, each with its own processes.

We hear a lot of talk about electronic medical records and other greatly anticipated advances in health information technology as the federal government commits tens of billions of dollars to these new tools. HIT will save money by introducing efficiencies into the system, we are told. It will eliminate redundant tests and improve the quality of care by emphasizing the use of cost-effective, proven treatments. It will reduce medical errors and ensure that physicians have full access to a patient's medical history and current data on what drugs they're taking.

That sounds great. I hope it works.

We don't, however, hear much talk about how the new age of HIT will reduce the snarling red tape of claims and formulary processing into a manageable mess that doesn't consume valuable time, effort, and up to $31 billion a year that could be spent on patient care.

In every physician satisfaction survey or report I've read, haggling with insurers regularly places among the top sore spots for physicians. Some physicians say it is driving them out of medicine. In the HealthLeaders Media Industry Survey 2009, physician leaders noted their frustration with insurers. Other than higher reimbursement rates (51%), the thing doctors said would most improve payer relations was to speed up processing, fixing, and paying of claims (20%).

If government wants physicians to embrace HIT, then government must demonstrate that this new technology will reduce insurance hassles. These daily skirmishes with insurers are low-hanging branches in the move to trim healthcare costs. Let's hope HIT comes with a pair of pruning shears.