Administrative Costs Associated with Physician Billing and Insurance-Related Activities at an Academic Health Care System

Phillip  Tseng; Robert S. Kaplan; Barak D. Richman; Mahek A. Shah; Kevin A. Schulman

Article | JAMA, the Journal of the American Medical Association

Administrative Costs Associated with Physician Billing and Insurance-Related Activities at an Academic Health Care System

by Phillip Tseng, Robert S. Kaplan, Barak D. Richman, Mahek A. Shah and Kevin A. Schulman

Abstract

The federal government mandated adoption of certified electronic health record systems (EHR), at least in part, to reduce administrative costs for physicians. This study used time-driven activity-based costing to determine the administrative costs associated with billing and insurance activities at a large academic health care center that had a certified EHR system. The center enjoyed economies of scale by concentrating its bill paying functions within a single, dedicated unit. The study found that costs for processing a single bill ranged from $20 for a primary care visit, about 20% of revenues, up to $215 for an inpatient surgical procedure. The high costs were not caused by wasteful, inefficient processes, duplicate or redundant tasks, or the inappropriate use of high-wage personnel to perform low-skilled tasks. Rather, they were driven by the heterogeneous payment requirements across the multiple payers and health plans contracting with the academic health center.

Keywords: Health Care and Treatment; Cost Management; Insurance; Problems and Challenges;

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Tseng, Phillip, Robert S. Kaplan, Barak D. Richman, Mahek A. Shah, and Kevin A. Schulman. "Administrative Costs Associated with Physician Billing and Insurance-Related Activities at an Academic Health Care System." JAMA, the Journal of the American Medical Association 319, no. 7 (February 20, 2018): 691–697.

Partners in Health, a global NGO focused on delivering health care to residents of rural underserved communities, conducts a project on the cost of primary care at five sites in the Central Highlands of Haiti. It devises a simple approach for tracking the resources used by patients being treated for diverse medical conditions, as an input to a time-driven activity-based costing model. The results show considerable cost diversity across the five sites, but organizational leaders differ on the interpretation and action implications of the findings.

Article | Harvard Business Review | January–February 2018

Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality

Robert S. Kaplan, George Serafeim and Eduardo Tugendhat

More than a billion people in the developing world remain in extreme poverty and outside the formal economy. Traditional CSR programs have done little to alleviate the situation and rarely produce transformative change.
Instead of trying to fix local problems, the authors argue, corporations need to reimagine the regional ecosystems in which they participate. They should search for systemic, multisector opportunities; mobilize complementary partners; and obtain seed and scale-up financing from organizations with a mission to alleviate poverty. They should also align the various stakeholders around the new strategy, using proven tools such as a co-created strategy map.
These principles are informed by the authors’ experience with several successful inclusive-growth projects. An initiative in Uganda is bringing small maize farmers into the mainstream regional economy, while a training program in El Salvador is giving unemployed youths the skills to work in the country’s growing service sector.

Keywords: inclusive growth; sustainability; social impact; Business Strategy; shared value; impact investing; inequality; Poverty; corporate governance; balanced scorecard; strategy execution; Economic Growth; Developing Countries and Economies; Poverty; Equality and Inequality; Corporate Social Responsibility and Impact; Strategy; Investment;

Citation:

Kaplan, Robert S., George Serafeim, and Eduardo Tugendhat. "Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality." Harvard Business Review 96, no. 1 (January–February 2018): 127–133. View Details

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Endoscopic/Colonoscopic procedures are done either with gastroenterologist-administered conscious sedation or with anesthesia-administered sedation with propofol. Anesthesia-administered sedation has medical and patient benefits but is more expensive to administer. We used time derived activity based costing to compare the true cost of GI procedures done with gastroenterologist-administered conscious sedation versus anesthesia –administered sedation. The study showed that the incremental costs associated with anesthesia-administered sedation, when all factors are considered, are much lower than previously believed.

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Administrative Costs Associated with Physician Billing and Insurance-Related Activities at an Academic Health Care System

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