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February 20, 2018

Disentangling Health Care Billing: For Patients’ Physical and Financial Health

Author Affiliations
  • 1Department of Radiology, University of Utah, Salt Lake City
  • 2Institute for Healthcare Improvement, Cambridge, Massachusetts
  • 3Division of General Internal Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
JAMA. 2018;319(7):661-663. doi:10.1001/jama.2017.19966

For many physicians, the term administration elicits a negative response. In fact, some administrative tasks and expenses, such as quality improvement personnel, cybersecurity, backup generators, and even parking, are necessary to enhance patient experience and care. Other expenses, most notably related to billing and insurance-related activities, seem less justifiable.

In this issue of JAMA, Tseng and colleagues1 estimated the administrative costs associated with physician billing and insurance-related activities in one large academic medical center with a fully implemented electronic health record (EHR) system. Based on a time-driven activity-based costing method and interviews with health system administrators and physicians, the authors estimated that the costs associated with billing activities performed by physicians represented, as a proportion of professional revenue, 14.5% for primary care visits, 25.2% for emergency department visits, 8.0% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures, and 3.1% for inpatient surgical procedures.1 For primary care visits, this translated to an estimated more than $99 000 of billing and insurance-related expenses annually for each primary care physician working in the system just to get paid.

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