Paperwork Costs: A Hidden Boom in Medical Bills

DANIEL S. GREENBERG

March 17, 1992|By DANIEL S. GREENBERG

WASHINGTON — Washington. -- Like a feverish thermometer reading or a worrisome blood count, the alarming news from the world of medical practice is that times are good for the managers of medical practice.

These are laymen -- not doctors -- who have mastered the mysteries of insurance forms, reimbursement regulations and the scheduling of patients to keep the doctors busy. The fact that the managers are doing well means that the administration of medical paperwork has ascended to a level of complexity that warrants a well-rewarded place on the payroll -- financed, of course, by patients.

According to American Medical News, weekly newspaper of the American Medical Association, the median salary for the administrators of groups of up to six doctors rose from $36,500 in 1985 to $46,000 last year. For larger groups -- those with eight or ten clerks, nurses and other non-physician help -- the pay a decade ago was the equivalent of $25,000 in today's money. At present, the paper reports, the pay ranges from $40,000 to $70,000, adding that ''Not only must today's practice managers know the basics of patient scheduling and insurance billing, they must also be up on the latest Medicare regulations to avoid drawing audits or payment denials.''

Skilled managers of paperwork are the modern-day equivalents of expert guides for tenderfoots in the wilderness. And given the barrage of paper that accompanies medical service, doctors and patients owe gratitude to these specialists in administrative navigation.

But the thought is unavoidable that if the health-care paperwork weren't there in the first place, the services of paperwork managers could be dispensed with, at some considerable relief for the nation's runaway health costs.

The expenses of coping with the individual paperwork peculiarities of America's 1,500 or so health insurers are prodigious, according to the General Accounting Office, which performs research for Congressional committees. In a report last year on Canada's system of universal health insurance administered by the provincial governments, the GAO reported that paperwork has been reduced to the point where a ''Canadian hospital has virtually no billing department and a minimal accounting structure to assign costs and charges to patients and physicians.''

In contrast, the billing department is as essential to a thriving American hospital as the emergency room. However, the rules of reimbursement are so complex that hospitals sometimes find they have neglected to bill Medicare for huge sums, or Medicare finds that hospitals have charged in excess of the prescribed amounts. Medicare's inspectors are on constant patrol for ripoffs, while a sizable consulting industry has arisen to guide hospitals in getting their rightful due from the government and private insurers. Rather than merely serving as a payment system for health care, the insurance industry has become a burden on health care. Insurance is yet to cure its first patient.

The GAO estimated that a paperwork reduction comparable to Canada's would save nearly $70 billion a year in the U.S., nearly 10 percent of national health-care spending. The report noted that the savings would be more than enough to provide health insurance for the 35 million who can't afford it.

The elimination of paperwork spawned by medical insurance would be an economic blessing. If accompanied by a uniform coverage for all, it would also remove one of the great terrors of health insurance -- confusion and uncertainty over what's covered and in what circumstances.

One need not be a medical office manager to comprehend the provisions of the ordinary health-insurance policy, but it helps.

Daniel S. Greenberg publishes Science & Government Report, a Washington-based newsletter.

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