Getting Paid to Care: The Cost of Providing Healthcare

One of the reasons I haven’t written as many posts as I’d like is that I spend a lot more time than I used to writing and typing stuff so I can get paid. Four years ago, I was all for it when the homecare agency I work for finally bought us clinicians some laptops and bought the whole agency some documentation software. It involved a massive outlay of money, effort, and training. And that was just the beginning. There were — and still are — the inevitable software bugs, crashes, server inadequacies, updates, errors, and just-plain-mystifying nonsense. There were — and still are — too many time-consuming emails, meetings, seminars, and phone calls needed to fix things. But still, I was psyched. At last, we were moving into the 21st century! At last, we could blast through our visit notes and spend more time actually helping our patients! Boy, was I wrong.

For me, there were further, unexpected ramifications. I had just returned to work, after acute cancer treatment was over, when all these changes began taking place. Within months of being back on the job, the long- and late-term side effects of cancer treatment forced me to cut back my hours, from full to part-time. First, I had to cut them in half. Eventually, I clawed my way through the murky side effects ditch back to working four days a week, instead of the five I used to do. However, thanks to our 21st century documentation, I still work five days a week. I just don’t get paid for it. Sometimes, when I’m tightening my belt yet again because it’s hard to pay my bills with one-fifth less income, I think about trying to return to full-time. But I know that if I did, I’d end up working 50 hours a week instead of 40, and I just can’t do that anymore. I’m also very well aware of being fortunate that, despite fatigue, pain, brain fog, financial stress, and the ever-present anxiety of cancer vigilance, I can do my job at all.

Ten Dollar Aspirins

This past week, Steven Brill wrote a piece for Time called Bitter Pill: Why Medical Bills Are Killing Us. It has been widely and justifiably shared on social media. The points Brill makes that have stirred perhaps the most outrage and discussion concern the “lopsided pricing and outsize profits” inherent in the system. If you examine an itemized bill for a hospital stay, that includes items like $29 for a few gauze pads that actually cost a nickel a pad, or $10,000 charges for one dose of a chemo drug that may cost the manufacturer $200, it’s hard not to feel like we’re all getting shamelessly gouged. Indeed, when you move into the realm of cancer care, you begin to understand the pressure cooker of spiralling costs to which both doctors and patients contribute. In her memoir, The Cost of Hope, journalist Amanda Bennett poignantly described how much it cost to treat, and ultimately fail to save, her husband from the ravages of kidney cancer. Over the seven years of his care, the motivation to do everything possible led to expensive duplication and redundancy of services. As she researched the details for her book, she found, in just one stunning example, that her husband had received a total of 76 CT scans. Bennet asked, “Were all of them useful and ordered for a good reason? I’m positive of that. Were all of them necessary? I’m just as sure not.”

As someone who has a foot in both camps, the patient camp and the clinician camp, what most interested me about Brill’s article was the first part of it, in which he discusses how much it costs to administer healthcare. And why. Medicare, for example, has to be more accountable for every dollar in its budget, and thus manages to spend less than 1 cent of every dollar it pays for actual healthcare delivery on billing and administration. In marked contrast, the average health insurance company — Brill uses the example of Aetna — easily spends 30 cents of every dollar just to process claims and pay its management. And that’s just the payer side.

Paperwork or Patient Care?

On my side, the provider side, every hour I spend trying to document what I do for my patients means one less hour I can spend actually doing it. And that does not include the hours my administrative colleagues spend, dotting all our i’s and crossing our t’s, so that my employer can satisfy the dozens of different requirements mandated by all the different insurers our patients use, and all their several insurance plans, each with its own set of rules, so that, ultimately, we can get paid to do what we do.

A book published a few years ago by the National Institutes of Health, called The Healthcare Imperative: Lowering Costs and Improving Outcomes, describes this insanity in detail. Studies conducted about ten years ago found that administrative costs for delivering care in U.S. hospitals comprised about 27% of their total revenue. For physician practices, the percentage was 24%. The authors describe three main factors contributing to this, dubbed complexity, variation, and friction. From the book:

The first is complexity. The insurance process has multiple steps, often demanding precise accuracy and attention to detail. BIR steps [or the activity involved in billing insurance companies] include contracting with insurers and subcontracted providers; maintaining benefits databases; determining patient insurance and cost sharing; collecting copayments, formulary, and prior authorization; coding of services delivered; checking and submitting claims; receiving and depositing payments; appealing denials and underpayments; collecting from patients; negotiating end-of-year resolution of unsettled claims; and paying subcontracted providers.

The second burdensome feature of managing insurance is variation. Due to consolidation of insurers in recent decades, a provider practice likely has fewer payers to deal with. However, each payer offers multiple products and often further customizes products to individual purchasers (such as a large employer). Each provider may have to deal with dozens to hundreds of different plans. Providers must track plan-specific benefits and reimbursement rules, maintain special databases and benefit experts, and conduct time-consuming checks of plan details prospectively and in response to claims denials. This situation is in stark contrast to privately administered plans in other developed countries, where there is typically a single primary benefits package.

The third feature is friction. Many BIR steps slow and complicate the process of getting paid. These include priority authorizations and formulary restrictions, high rates of nonpayment for initial submissions (10 to 15 percent), underpayments, and ultimate non- and underpayment (5 to 10 percent) (Gans, 2009). Providers express frustration and occasionally a suspicion that the process is kept complicated to lower ultimate payment levels.

Yup. Couldn’t have said it better myself. One of the things that was potentially supposed to help fix all this was the advent of electronic medical records. However, now that we have them, I can say, from both of the camps I occupy, that computerized health documentation is very far from living up to its vaunted potential for providing genuine efficiency or cost savings to patients and providers. A study published in Risk Management and Healthcare Policy outlines some of these potential benefits and real drawbacks. One of the obvious problems I see every day is that most of the myriad software systems in place are unable to ‘talk’ to one another. Despite the hours I spend every week typing patient notes in my laptop, I still have to fill out mountains of paper forms, write and send faxes, and make myriad phone calls to find out what I need to know. Last week, just obtaining a copy of the pathology report from my recent colonoscopy required me to make several phone calls, then physically drive to the hospital, and find my way through a labyrinth of corriders to sign a form that would allow a clerk to look up my record and print it out.

By all means, let’s keep the pressure on the makers of overpriced diagnostic equipment and drugs, hospitals that charge us five bucks for every 5-cent bandaid, and specialists who charge thousands to perform one procedure, to suck it up and cut their charges. But for heaven’s sake, it seems to me we should look at how much time all of us who deliver healthcare spend NOT delivering healthcare. And why. And how much it’s costing us all.

Further reading:
What if you ‘shopped’ for the best price on a hospital procedure?
Is Single-Payer Healthcare Inevitable?

This entry was written by Kathi, posted on Saturday, February 23, 2013 at 03:02 pm, filed under Health & Healthcare, My Work Life and tagged , , , , , . Bookmark the permalink . Post a comment below or leave a trackback: Trackback URL.

14 Responses to “Getting Paid to Care: The Cost of Providing Healthcare”

  1. Kathi,

    This is an excellent, comprehensive post. The way the medical system is set up, it hinders patient care rather than improves it. Yes, I’ve seen my bills — even if insurance covered it — and yes, I can testify that gauze actually costs a lot of money. Every item seems to have a hiked-up cost. I’m sorry you have so much paperwork that you can’t spend your time doing what you were meant to do: serve patients. I’m going to check out that Brill piece.

    As far as not being able to write as many posts as you like, I totally get that frustration. The quality of your posts, however, is simply wonderful.



  2. Beth, thank you so much for your kind comment! Yes, isn’t it frustrating! I don’t know whether I’m coming or going sometimes. So many clinicians in healthcare now are working with burnout, too, I fear. Not a good thing.

  3. Kathi,
    How true for me. While I do find seeing my patients (Neurology) very tiring somedays, and reading film, reviewing results and calling patients back, to say nothing of renewing prescriptions after checking every chart every time before doing so, it is the writing of notes to meet the absurd standards required by CMS, the umbrella for Medicare and Medicaid, and therefore all the other insurance companies as they piggyback onto the regulations and add some of their own, that keeps me at work until 8 or 9 pm on nights that my clinic was really full or the patients were particularly complex. And I only work 4 days so I can have Wedsnesdays off in the middle to recover, theoretically 4 10-hour days, but there are Wednesdays I sit on my sofa and write notes all day as there is also a 48hrtime requirement in writing the notes. And they just keep coming anyway so I might never catch up. It’s a constant burden. Relationships are damaged by it, my children know not to call to chat in the evening, I never go out after work because I’m writing notes. I don’t go to the gym after work because my dogs are waiting for me and it would be midnight before we got to bed. And I need so much sleep anyway.

    If I stop practicing it will be because of the paperwork, not the patients, and that will be a damn shame because I am really good at what I do but I’m being broken by the petty nonsense that is bureaucratic bullying by bean counters. They can’t do what I do, but they can push me around and make me do their will and it wastes my time and energy, stops me seeing as many patients as I could, makes me hate my job some days, wastes money, and wears me out.

    And as for too many studies, my problem is that I very often am obstructed from obtaining studies that my patients desperately need unless I spend literally hours arguing with clerks and finally doctors who are no longer practicing but who are incentivized to deny studies in order to persuade them to authorize a study for my patient whom they have never met or examined. And yet if I tell my patient that it is their insurance company and that they should talk to their employer or the insurance company, then I become the bad guy. As though I make the decisions about exclusion of care.

    I’m exhausted just thinking about it. Really I think all the time about finding something else to do. I love parts of my job but I’m paying such a high price to do it. I really do believe that the stressors of my job played a huge part in my vulnerability to cancer and it scares me that I am still exposed to the danger.
    Every provider I know says the same thing, we are all grossly underpaid because of the burden of the paperwork, we love seeing patients but we all resent the additional grind that is laid upon us for which we are penalized severely if we do not comply. I think it is a big part of a cost that we really haven’t accurately tallied yet, and I think it will drive providers out of the professions in droves, and the bean counters can’t have a healthcare industry without us. They seem to think they can, but really all that is needed is patients and providers (I include everyone who takes care of a patient in a real way, from the front desk to the janitor, not the administrators). It is they who are extraneous.

    I have to lie down now!

  4. Oh, Anne, I can so entirely relate to everything you said. As I said to Beth, one of the huge problems now is that so many of us, whether or not we’ve had the additional burden of cancer, are at risk for burnout. Believe me, if I could afford it, I swear some days I would retire tomorrow. I know so many doctors, nurses, physical therapists like myself, and many others, who have cut their hours way down or have retired early because they just can’t take the stress anymore or the curtailment of their family and social lives. We are all paying a high price for this, both clinicians and patients. Around here, we’ve even seen something of a mini-trend where a few of our most conscientious family practice internists have retired from their private practices to go work in the ER or as hospitalists, where at least they know they can go home at the end of their shift (paperwork notwithstanding), and work regular hours. And I hate to say it, because I’m glad for many of the provisions of the Affordable Care Act, but as more patients are insured and get care, we can already tell that there will just not be enough doctors and clinicians to see them.

    I feel like I never really have time off anymore myself, because I spend so much of it catching up. And I never do really catch up. Dealing with cancer has only made it worse. Before cancer, I was a ball of fire compared to how I feel now. I no longer have the energy or mental concentration to sit on special committees or take on student interns or run around presenting at or attending seminars. I would love to do some clinical research as well, but I can’t even conceive of trying to organize that anymore.

    Thanks so much for sharing your comments and perspective. I don’t know what the fix is for all this, but I hope we can both hang in there.

  5. Kathi, I find my EMR “dumbs down” my notes as it only uses the pre-set boxes for “meaningful use” and all the typing I do to explain my thought process and plan is extraneous.
    I can only do clinical practice very part time for tolerability reasons.
    And, there is a blog, healthcarerenewal,, written by an MD from Brown, Roy Poses, that has exposed the lie that EMR’s will save costs and improve quality.
    There are now studies to back him up.
    Yes, paper is obsolete, but as my oncologist pointed out to me, the current generation of medical students/residents will write these formulaic, dumbed down notes (great editorial in NEJM from Jerome Groopman on the cut and paste in EMR’s called “Where’s Waldo”–how to find the salient point in an EMR note) and never know better.
    I accept that they are inevitable, but they haven’t improved the care I deliver…

  6. Yes, Judy, I find that as well. Our formulaic EMR doesn’t let us just cut to the chase. I find myself skipping over a lot of it & typing a regular note much of the time. When I admit someone to home care, I find that the computer generated discharge records frequently contain errors or just don’t even tell me what’s pertinent. Spend more time correcting these errors & omissions.

  7. It’s so frustrating. My hat is off to you and others like you who truly want to provide good care but are hindered by the system and all its red tape. Hopefully, writing this post was a bit therapeutic for you!

  8. The research I read was an eye-opener, Nancy. Validating, but frustrating, too. I sometimes feel like we’re heading for system collapse, which won’t be good for anyone.

  9. dear kathi,

    oh, how i miss seeing patients and their families but just reading your post made me recall such stress and futility with EMRs – i could only read it in small chunks. as a hospice RN, which most of us felt was a calling and not just a “job”, there was absolutely no way to give all the care and support i knew was so needed. our teams worked on average of 15-30 hours over and above salaried hours. hospice care is the ultimate “team care” model and to witness the encroachment of a corporate entity (who, by the way, set up several of the early EMR programs KNOWING they were faulty and couldn’t communicate with each other – in order to save $$ and pad their own damn salaries) chip away all that we held sacred about the priorities to care for dying patients was and continues to be devastating. with our dual cancer, i no longer practice. it’s sometimes very difficult to know all i know about what both sets of our fine medical teams go through, jumping through hoops for insurance companies and regulatory agencies – i find myself feeling guilty if i need a little more time to discuss important issues.

    what a superb job you have done, kathi, in putting together this post. that you continue to care so deeply for your patients as well as about these frustrating and very troubling and complex issues that so few people even know about is testament to how fortunate we are if we have clinicians who truly care for us and give their all every single day. i wish you could be released from all the stress, fatigue and burnout – i know the toll it takes both emotionally and physically. i will be BELIEVING for you, that somehow, someway something will present itself so that you are able to put any one, or all, of the many talents you possess to a more fulfilling and less draining situation. i hope you can feel all of the gratitude, admiration and love being sent your way and that it gives you some measure of comfort.

    much love, XOXO

    karen, TC

  10. Karen, I don’t if I was aware that you were a hospice nurse. I also work occasionally with our local hospice agency & my regular agency works regularly with cancer patients as well to provide care. It’s just so frustrating that the current system is making it so hard for all of us to do our jobs. I think, like you, most of us feel that we have a calling, and it’s only our commitment to it that keeps us all hanging in there despite the impediments we deal with. Thanks so much for the love. Love & admiration back, Karen.

  11. Across industries people are working more for less. It’s the sign of the times. Yet notice how no one every says the “I-word” for inflation? What would you estimate the increase in health care costs to be from ten years ago? Or the time investment that you spend per patient – paid vs. unpaid?

    I’m deeply concerned. Nor do I see any easy way out of this as the structure is so enmeshed if you tinker with one of the founding blocks (i.e, Medicare) the entire edifice quakes. But I’m so glad you took this on. My Time magazine arrived Saturday and I’ve not yet had the stomach to read it; but when I take my dose of courage for the day I’ll read it and the NIH report. Both – yes – are a bitter pill.

    I also know that after being a patient and having worked in hospitals how I “consume” health care is different now. When you have a $5,000 deductible whether or not a procedure or prescription is essential becomes a very important question.

    Thanks for a great post,

  12. Thanks, Jode. The first time I read Brill’s article, I groaned and put it away. The second time, I was able to take it in. I also found this piece in Forbes to be an interesting addition to the discussion:

    At least the points I’ve focussed on are in the Zeitgeist. The fix? I don’t know. One of the points made in The Cost of Hope is the startling observation, which I’ve read elsewhere, about the extent to which neither clinicians nor patients know how much each and every procedure/drug/test actually costs. We should ALL be asking that question more often. I heard an interesting interview recently about a study where the researcher shopped around for an orthopedic joint replacement — and the astonishing variation in the cost quoted to her among the 20 hospitals she contacted. I need to find that link, too, and include it here.

  13. Kathi,
    I agree with Jody’s comment about everyone across the board working more for less these days. This is so true.

    I also read the Time article. I completely agreed with the question raised – that we are in fact asking the wrong question and should be questioning why things cost so much in the first place. As a cancer patient, hubby and I were so many times completely flabbergasted by the high cost of things. For example, how can one post-chemo injection that I required after each infusion possibly cost $4500? Our deductible is relatively high, so we did/do indeed think through carefully before we sign up for a test or procedure.

    I’m sorry you feel so weighed down by paperwork. I hate how that takes time away that should be patient time. And all the duplication involved… it’s a real mess as you know all too well.

    There has to be a better way…

    Thanks for the post. Lots to ponder about. Keep the posts coming when you get the time to write them! Your insights are right on.

  14. This is a tough one. I have a good friend who is a lymphedema therapist and she spends an inordinate amount of time on paperwork to justify everything she does. If she doesn’t code correctly, all hell breaks loose.

    I am fortunate that the NCI pays for my current treatment because I am enrolled in a clinical trial. If I were to pay for these drugs on my own (including nurse cost and all associated costs), even with insurance kicking in, my costs would be sky high.

    I don’t know where the system is headed, but we need to find some solutions, especially with all the budget shortfalls. Thanks for posting on such an important topic. xox

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