Study: U.S. health insurance red tape costs $27 billion

Aug. 4, 2011 at 3:47 PM   |   Comments

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ITHACA, N.Y., Aug. 4 (UPI) -- The U.S. health insurance bureaucracy costs doctors some $27 billion extra per year compared with Canada's single-payer system, researchers found.

The study, published in the journal Health Affairs, found per-physician costs in the United States averaged $82,975 annually, while physicians in Ontario averaged $22,205 -- primarily because Canada's single-payer healthcare system is simpler.

Study co-author Sean Nicholson at Cornell University's College of Human Ecology and colleagues at the University of Toronto found U.S. physicians spend nearly $61,000 more than their Canadian counterparts each year on administrative expenses related to health insurance.

Physicians in Canada follow a single set of rules because of their single-payer system, while U.S. doctors grapple with different sets of regulations, procedures and forms mandated by each health insurance plan or payer, Nicholson said.

This bureaucratic burden falls heavily on U.S. nurses and medical practice staff, who spend 20.6 hours per physician per week strictly on administrative duties, while their Canadian counterparts spend only 2.5 hours, Nicholson said.

"Health insurance companies put some of these rules in place to keep healthcare costs down," Nicholson said in a statement. "The $27 billion of 'extra' cost to physicians have to be balanced against some of the benefits that come from following these rules."

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