Billing and insurance-related work costs $20.49 for a primary care visit and $215.10 for an inpatient surgical procedure, according to a 2018 JAMA study by Duke and Harvard researchers. The same study put staff and physician time at 13 minutes for the primary care visit and 100 minutes for the surgical stay.

How the study measured billing cost

Phillip Tseng, Robert Kaplan, Barak Richman, Mahek Shah and Kevin Schulman published the study in JAMA on February 20, 2018. The authors work at Duke University and Harvard Business School. They used time-driven activity-based costing at one large academic health care system with a certified electronic health record. The team interviewed 27 health system administrators and 34 physicians in 2016 and 2017. From those interviews they built a process map that follows an insurance claim through revenue cycle management, then priced each step of the map.

The study covers 5 encounter types: primary care visits, discharged emergency department visits, general medicine inpatient stays, ambulatory surgical procedures, and inpatient surgical procedures. Each result is an estimate of the time and cost a single encounter creates for the whole organization, from the billing office to the treating physician. The outcome measures were time in minutes, cost in dollars, and cost as a percentage of professional revenue.

Time and cost per encounter

Cost rises with the complexity of the encounter, though not in a straight line. A discharged emergency department visit cost $61.54, about three times the $20.49 for a primary care visit. The inpatient surgical procedure cost about 10.5 times the primary care visit ($215.10 against $20.49) and took about 7.7 times as many minutes (100 against 13). The ambulatory surgical procedure took only 2 minutes longer than the general inpatient stay (75 minutes against 73) yet cost $46.14 more, by the study's figures.

Encounter typeMinutes of billing workTotal billing cost
Primary care visit13$20.49
Discharged emergency department visit32$61.54
General medicine inpatient stay73$124.26
Ambulatory surgical procedure75$170.40
Inpatient surgical procedure100$215.10

Source: Tseng et al., JAMA, February 20, 2018.

How much of it lands on the physician

Physicians carried a small share of the work. The study gives the physician portion as a median of 3 minutes, or $6.36, for a primary care visit. For a primary care visit, that leaves $14.13 of the $20.49 in work done by people other than the physician. The time splits the same way: 10 of the 13 minutes belong to staff and administrators.

Encounter typePhysician minutes (median)Physician cost
Primary care visit3$6.36
Discharged emergency department visit3$10.97
General medicine inpatient stay5$13.29
Ambulatory surgical procedure15$51.20
Inpatient surgical procedure15$51.20

Source: Tseng et al., JAMA, February 20, 2018.

Surgical encounters take the most physician time, at 15 minutes and $51.20 each. In the 100-minute inpatient surgical procedure, the other 85 minutes belong to people who are not the physician. Staff work therefore drives the total in every row, and the gap widens as the encounter grows more complex.

Billing cost as a share of professional revenue

Dollar cost alone hides how heavy the burden is, so the study also compares billing cost with the professional revenue each encounter brings in. Primary care visits carry the second-highest share at 14.5%. The five results:

The inpatient surgical procedure has the highest dollar cost at $215.10 but the lowest share at 3.1%, because the professional revenue per procedure is far larger than the billing cost. The emergency department visit reverses that: at $61.54 it takes 25.2% of professional revenue, about 8 times the 3.1% share for the surgical stay.

A simple illustration, which is arithmetic and not a study result: 1,000 primary care visits at $20.49 each carry $20,490 in billing and insurance-related cost.

What billing costs in other countries

Richman and colleagues extended the work to other countries in Health Affairs in August 2022. They measured costs at 6 provider locations in 5 nations (Australia, Canada, Germany, the Netherlands and Singapore) and set the results beside the earlier U.S. study. After purchasing power parity adjustment, billing and insurance-related costs for an inpatient surgical bill ranged from $6 in Canada to $215 in the U.S.

The team sorted the work into 4 activities: eligibility, coding, submission and rework. Higher costs in the U.S. and Australia came mostly from coding. In the nations with lower costs, some savings came from giving tasks to people in lower-skill job categories. Most savings, the authors found, came from more efficient billing and insurance-related processes. Some nations also offered patients financial counseling before treatment.

Limits of the numbers for a single practice

The Tseng study comes from one academic health care system, with interviews held in 2016 and 2017. The figures are estimates built from the accounts of 27 administrators and 34 physicians, and not from a count of claims in a practice's own system. An independent practice has a different payer mix, software and staffing, so its cost per visit will differ from $20.49. The authors' own conclusion gives the range as $20 for a primary care visit to $215 for an inpatient surgical procedure, and says that knowing which billing activities add cost can inform ways to reduce it.

The method still transfers. A practice can time each step a claim takes, from eligibility check to rework, and multiply the minutes by the loaded hourly cost of the person who does the step. The JAMA study used that approach to reach 13 minutes for a primary care visit. Of those 13 minutes, the study assigned 3 to the physician.

Sources

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