The Institute of Center for American Progress states that clinicians and insurance companies spend about $496 billion in the medical billing process. Either it is in the form of insurance or the cost incurred while hiring medical billing companies to create bills.
However, the alarming fact is that only about one-half of the huge money of administrative costs accounts for profitable billing. Moreover, medical practitioners and hospital staff also spend millions on providing value-driven healthcare.
For many time now, the debate is on that American healthcare industry is spending way too much on the administrative burden. Medical billing companies also suffer in this regard. They need to upgrade their systems to match the quality of administrative work.
What Should Be Done?
The high spending in healthcare with no particular outcomes has always been a concern. Thus, healthcare leaders have voiced the need for structural reforms in medical billing services.
Can We Expect to See Decrement in the Healthcare Expenditure?
As per the Revcycle Intelligence, it is estimated by the governing authorities that if no major changes are done, healthcare expenditure will increase by 5.5% on annual basis with an increment of 19% in GDP.
America spends double the money on healthcare as compared to other nations, and still, it is not among the top healthcare systems of the world. Provided these facts, you can get an idea of where healthcare will be going in the coming future.
Reasons for High Expenditure on Medical Billing Companies
As mentioned above, the major reason to blame is the administrative cost. It has also influenced the physicians’ performance as they are forced to spend half of their precious time in counting numbers rather than doing their actual work. Thus, when they spend so much time on medical claims that may result in denial, how can they improve revenue cycle management?
In addition, the little revenue they generate is not solely spent on them. But, a significant portion has to be added in the accounts of medical billing services.
Different Billing Rates for Different Medical Procedures
Another reason that researchers found out is that different types of healthcare visits cost differently. For Instance, a study report of an academic health system highlights the following data set for medical billing.
- Primary healthcare visit costs about $20.49.
- Inpatient stay costs about $124.26.
- Emergency department visit costs about $61.54.
Based on these facts and the revenue associated with each type of visit, emergency department visit accounts for the highest billing cost, up to 25.2% of revenue.
On the contrary, inpatient stay cost the lowest as associated with the patient’s stay in the hospital.
Time Spent on Billing Services is Huge
With administrative cost, comes increased time consumption while processing medical claims. On an average, medical billing companies spend 13 minutes for primary care visit, 32 minutes for emergency department visit, and 73 minutes for a general inpatient stay.
The more time, medical billing services spend on analyzing medical claims, the more they charge physicians for their time.
Healthcare Industry Needs to Take Serious Actions!
Simple healthcare systems that have an easy reimbursement system can be a guiding light for the U.S healthcare industry.
Healthcare leaders propose that a single-payer healthcare system is a way forward towards the progressive route. However, only reducing administrative burden will not generate favorable results for revenue cycle management.
Healthcare quality should be the focus along with setting forth reasonable rates for the medical procedures. Moreover, the centralized processing of medical claims can also reduce healthcare expenditure.
Comment if you believe these reforms will somehow show a positive influence on the US healthcare system, or, do you think the opposite?
Share your thoughts at https://www.linkedin.com/company/p3-healthcare-solutions