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Why Is There So Much Less Paperwork In Canadian Health Care?

If you ask internists and their patients what makes them bonkers about the U.S. health care system, paperwork will top the list. Many will point to the federal government as the culprit, citing the many forms, RAC audits, pre-and post-payment reviews, documentation and coding guidelines, HIPAA privacy rules, quality measurement and reporting, Part D drug formularies, and HIT meaningful use requirements imposed by Medicare and other federal programs. (Some put more of the blame on private insurers and pharmacy benefit managers.)

But if paperwork is associated with the degree of government involvement in health care, then Canada–a single payer system–should have more of it than the United States, right? Think again.

A new Health Affairs survey of U.S. physicians and practice administrators found that U.S. physicians spend almost ten times more interacting with health plans than their Ontario counterparts spend on interactions with Canada’s single-payer plan. The Ontario physicians and administrators spent “$22,205 per physician per year interacting with Canada’s single-payer agency–just 27 percent of the $82,975 per physician per year spent in the United States. U.S. nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans–nearly ten times that of their Ontario counterparts. If U.S. physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year.” (The complete study is available on a subscription or pay-for-reprint basis).

Why do U.S. doctors spend so much more time and money on health plan interactions? “The notable difference between the United States and Ontario is that non-physician staff members in the United States spend larger amounts of time on billing and obtaining prior authorizations” than their Canadian counterparts. In the United States’ “each health plan offers many different insurance products to consumers, and each may have its own formulary (or list of approved drugs); prior authorization requirements; and rules for billing, submitting claims, and adjudication. In contrast, Canadian physicians generally interact with a single payer that offers a single product, and they are subject to fewer managed care requirements.” The authors acknowledge that there are “possible benefits” generated by having more payers and the associated higher administrative tasks in the U.S. system– “for example, benefits that may arise from competition, innovation, and choice among insurance products.”

The U.S. is not likely to adopt the Canadian system, and there is much that can be done to streamline and reduce paperwork while still preserving a pluralistic, multiple payer system of health insurance. (For all of the hyperbole about Obama’s Affordable Care Act being “socialized medicine,” it actually props up and subsidizes a pluralistic system of private and public health insurance, even as it requires insurers to standardize many of their administrative transactions.)

The Health Affairs study belies the notion that more government automatically leads to more paperwork and administrative costs, or the contrary narrative that less government leads to less paperwork. Our Canadian neighbors show us that it is possible to have a government-run health care system with far lower administrative costs and far less paperwork than the United States has with its multiple payers. (Although, if the U.S. were to adopt a single payer system, it might still impose more paperwork on physicians than Canada does–as the U.S. Medicare program already does in managing its drug benefit.)

It is also possible to imagine a system that expands the role of government and maintains pa pluralistic choice of private and public health insurance options, but with administrative transactions standardized and automated–as the ACA promises to do.

Today’s question: What do you think the Health Affairs study says about the argument that the answer to the paperwork pandemic is to get government out of health care?

*This blog post was originally published at The ACP Advocate Blog by Bob Doherty*

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