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American docs outspend Canadian counterparts almost 4-to-1 on insurance costs, says study

American doctors spend nearly four times more in their dealings with insurance providers than their professional counterparts to the north -- the result of a more complex and fragmented American health insurance system.

That's according to a new cross-border study conducted by doctors and public health specialists from the University of Toronto and Cornell.

Published in this month's issue of Health Affairs, the team of six researchers estimate that American physicians spend an average of $82,975 every year in their administrative interactions with health insurance providers. In contrast, a doctor in Canada is expected to spend $22,205 a year, a mere 27 per cent of the American average.

According to the study, the large disparity in spending patterns arrises from the byzantine nature of the American health insurance system. Rather than interacting with a single insurer, American doctors must juggle the separate funding formulas, eligibility standards, billing forms, and reimbursement procedures of competing insurance companies.

As a result, says the study, U.S. practices must spend more time -- and more money -- navigating the overlapping bureaucracy.

"US nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans," says the study. To put that figure in perspective, the study estimates that Canadian physicians dedicate under three hours per week to the same task.

"If US physicians had administrative costs similar to those of Ontario, the total savings would be approximately $27.6 billion per year," the study concludes. "The results support the opinion shared by many US health care leaders interviewed for the study that interactions between physician practices and health plans could be performed more efficiently."

While the American estimates were based on a nation-wide poll, the research team produced their Canadian estimates by extrapolating from a survey of doctors and administrators in Ontario only.

Ben Christopher is completing a practicum at The Tyee.

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