Schulman in JAMA: EHRs do not lower admin billing costs

Thursday, February 22, 2018

Reduction of administrative costs was one of the main reasons for the adoption of electronic health records (EHRs) but according to a new study published this week in the Journal of the American Medical Association (JAMA), that may not be the case. GIM Professor Kevin Schulman, MD, MPH, was the senior author on this article entitled Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care Systempublished February 20, 2018.

"After investing more than $30 billion in health IT, we haven't improved the administrative efficiency," says Schulman. "That was one of the big promises of digitizing records."

The researchers examined the use of a certified EHR at a large academic healthcare system, which found estimated costs for billing and insurance-related functions were substantial and varied by the type of clinical encounter.

The team looked at five different patient encounters:

  1. discharged emergency department visits
  2. primary care visits
  3. ambulatory surgical procedures
  4. general medicine inpatient stays
  5. inpatient surgical procedures

They found that the estimated processing time and total costs for billing and insurance-related activities were were "13 minutes and $20.49 for a primary care visit, 32 minutes and $61.54 for an emergency department visit, 73 minutes and $124.26 for a general inpatient stay, 75 minutes and $170.40 for an ambulatory surgery procedure, and 100 minutes and $215.10 for an inpatient surgical procedure. All estimates include costs for both professional billing and hospital billing." These are contrasted with the billing costs for professional services ranging "from 3.1% to 25.3% of professional revenue, which represented $20 to $215 in absolute costs per visit." 

Our readers will want to see the study and to take in the limitations on the way to considering policy solutions to reduce these expenditures.

"We hope this will be a wake-up call that it's time to focus on administrative simplification."

"We hope this will be a wake-up call that it's time to focus on administrative simplification," says Schulman.

Note: this publication, as of 2/25/26, has an Altmetrics score of 355, showing traction in 9 news outlets plus 100's of tweets.

Click here to read the full article. 

Citation: 
Tseng P, Kaplan RS, Richman BD, Shah MA, Schulman KA. Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care System. JAMA. 2018;319(7):691-697. PMID: 29466590 [link]