U.S. Health Insurance Reimbursement Paperwork Expensive

U.S. physicians spend nearly $61,000 more than their Canadian counterparts each year on administrative expenses related to health insurance. . . . The study, published in the August issue of the journal Health Affairs, found that per-physician costs in the U.S. averaged $82,975 annually, while Ontario-based physicians averaged $22,205 -- primarily because Canada's single-payer health care system is simpler.

Canadian physicians follow a single set of rules, but U.S. doctors grapple with different sets of regulations, procedures and forms mandated by each health insurance plan or payer. The bureaucratic burden falls heavily on U.S. nurses and medical practice staff, who spend 20.6 hours per physician per week on administrative duties; their Canadian counterparts spend only 2.5 hours. . . . "It's the nurse time and the clerical time, rather than physician time, that's different." . . . The result is an additional $27 billion spent every year in the U.S. when compared to the costs incurred by physicians in Canada.

From here.

The justification for the heavy bureaucratic burden and rules in the U.S. is "to keep health care costs down" but, there is little evidence tht they actually work as intended to do so (the U.S. has the highest health care costs in the world for less than the best care in the world and a bad cost trendline compared to the rest of the world that is long standing).

There are parts of the system, like U.S. government run single payer for the elderly health care system called Medicare and the Veteran's Administration Hospital systems (also run by the U.S. government), that are quite efficient in terms of administrative costs and cost control and outcomes relative to the private health insurance managed part of the market. But, the nation chose not to do that in the most recent round of health care reform out of an ideological commitment to the private sector provision of this insurance function, contrary to the empirical evidence that government insurance is more efficient and better at cost control and produces better outcomes than a private insurance company managed system in the area of health care.

It is also important to mention what the Canadian system is and is not. Health care providers in Canada, by and large, are not government employees (unlike the British health care system). They have their own businesses just like American health care providers do. But, Canadian private sector health care providers fill out insurance forms for one health insurance company run as a government agency, rather than many private sector health insurance companies.

Canadians have decided that it is important to let the private sector handle the very personal business of deciding who will provide you with health care but that the far less personal business (which most Americans have no choice in anyway) of deciding who will process the health insurance claims to decide if they will be paid is not very important ideologically or practically, given the huge cost savings this approach provides and the better cost controls that it facilitates.