Patients pay their insurance company to cover medical procedures. The insurance companies make money when the patients are healthy, and the patients don’t pay full value for the medical procedures they do need. Everyone wins.

Inadequate Health Insurance Payments

Not the doctors. Patients pay and insurance companies reimburse only for procedures provided. Doctors foot the bill for all the administrative tasks in the office. The time spent doing tasks like calling insurers to get approval for procedures and medications or filling out forms for disability and other programs are taking up more and more of a doctor’s time, causing them to spend more hours and more money on such tasks.

Healthcare Administrative Costs

And now, not always the patients. Some doctors are starting to charge administrative fees to their patients in order to cover their expenses. An article by the Los Angeles Times addresses why this practice is growing. They cite a study published in the journal Health Affairs, which found “that when time spent interacting with insurance companies was converted into dollars, practices spent on average $68,274 per doctor per year.” They also cite the Medical Group Management Assn., a national trade group representing nearly 15,000 physician practices, which says that operating costs for practice have increased 50% over the last decade, while reimbursement from insurance companies hasn’t matched that growth.

The current reimbursement system pays doctors for the procedures, but doesn’t give them the money to set up the procedures. As costs have been rising for doctors, insurance companies haven’t matched that, making it harder for doctors to do their jobs.

Rising Medical Costs

Is it the insurance company’s job to pace reimbursement with rising costs for doctors? Is it their job to cover all the time that’s involved with setting up the procedure, including paperwork and phone calls, especially when many of them have to do with insurance coverage? Or should doctors figure out ways to cut costs, as they always have? Should patients have to pay for this?

Administrative costs are part of any business. In order to stay in business, they need to cover their operating costs. But that’s their responsibility, not the patients’. Doctors need to find ways to cut costs and make their business run efficiently before they start charging patients for costs that aren’t medical, but business.

The one thing that is a definite problem in this situation is the reimbursement system. When the insurance companies’ procedures cost the doctors money, and the reimbursements haven’t grown with the operating costs, the doctors are put in a bind.  And so are the patients.

Thanks for reading!

Rebecca Busch

Healthcare Advocate