Billing and insurance related administrative costs: A cross national analysis

Barak D. Richman*, Robert S. Kaplan, Japees Kohli, Dennis Purcell, Mahek Shah, Igna Bonfrer, Brian Golden, Rosemary Hannam, Will Mitchell, Daniel Cehic, Garry Crispin, Kevin A. Schulman

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

9 Citations (Scopus)
377 Downloads (Pure)

Abstract

Billing and insurance–related costs are a significant source of wasteful health care spending in Organization for Economic Cooperation and Development nations, but these administrative burdens vary across national systems. We executed a microlevel accounting of these costs in different national settings at six provider locations in five nations (Australia, Canada, Germany, the Netherlands, and Singapore) that supplements our prior study measuring the costs in the US. We found that billing and insurance–related costs for inpatient bills range from a low of $6 in Canada to a high of $215 in the US for an inpatient surgical bill (purchasing power parity adjusted). We created a taxonomy of billing and insurance–related activities (eligibility, coding, submission, and rework) that was applied to data from the six sites and allows cross-national comparisons. Higher costs in the US and Australia are attributed to high coding costs. Much of the savings achieved in some nations is attributable to assigning tasks to people in lower-skill job categories, although most of the savings are due to more efficient billing and insurance–related processes. Some nations also reduce these costs by offering financial counseling to patients before treatment. Our microlevel approach can identify specific cost drivers and reveal national billing features that reduce coding costs. It illustrates a valuable pathway for future research in understanding and mitigating administrative costs in health care.
Original languageEnglish
Pages (from-to)1098-1106
Number of pages9
JournalHealth Affairs
Volume41
Issue number8
DOIs
Publication statusPublished - Aug 2022

Bibliographical note

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© 2022 Project HOPE— The People-to-People Health Foundation, Inc.

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