One or Many Payers

A very interesting study of medical costs has just been published by Cornell professors.  The study compares the administrative costs to process health insurance claims by doctors in the U.S. and Canada. Intuitively, we know that the U.S. costs should be higher, as our doctors have to deal with several insurance companies to get their money, while Canadian doctors are paid by the government. The study concludes that the cost differential is $61,770 annually. This is largely due to the fact that the doctor's administrative staff in the U.S. spends 20.6 hours a week processing claims, the Canadians spend 2.5. The researchers estimate that these extra costs amount to $27 billion per year.