Simplifying US Healthcare Could Save $27.6 Billion a Year


Find the study at Health Affairs.

US health care spending could be cut by billions a year if doctors spent the same amount of time and money dealing with insurance plans as their Canadian counterparts, according to a new study.

Canada has a “single-payer” system for health care financing, under which doctors deal with just one paying agency, while American doctors have to interact with their patients’ many different insurance plans.

“If US physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year,” said the study led by Dante Morra of the University of Toronto.

Because of the multi-layered US system, doctors spend nearly $83,000 per physician per year interacting with multiple insurance companies, compared to around $22,000 for doctors in Ontario, the study found.

Staff in US doctors’ offices also spend around 10 times longer per physician per week dealing with health plans than their Canadian counterparts, according to the study by researchers at Cornell University and the University of Toronto.

US nursing staff and medical assistants spend around 21 hours a week per doctor dealing with insurance providers compared with around 2.5 hours a week for Canadian nurses and medical practice workers, said the study published in the Health Affairs journal.

“Many factors contribute to the high cost of health care in the United States, but there is broad consensus that administrative costs in the health care system are high and could be reduced,” the study said.

“Interactions between physician practices and health insurance plans are one prominent component of administrative costs.”


  1. Vashti Winterburg on August 5, 2011 at 6:23 pm

    Actually, the amount saved could probably be considerably more. This study goes on to say that U.S. doctors could probably save more by going to computerized health records for billing purposes. Here’s the problem: when you try to connect billing to patients’ records, every time you add an insurance company to the system you multiply the complexity and cost of the computer program. This is why computer programs can cost hundreds of thousands of dollars and for large practices, millions of dollars. You’re also adding tech support to maintain and update the program. If you’re a Canadian physician or the VA with only one or no entity to bill, computerized records are great and economical, otherwise you can be looking at a major expense. So $27.6 Billion saved? I’m betting with Single Payer that number could be considerably larger. I’d like to know who paid for this study.