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Nathan Golia
Nathan Golia
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Study Suggests Canada's Single-Payer System Costs Less than U.S.

The research from Cornell University and the University of Toronto found that American doctors must pay on average $61,000 more per year for administrative costs associated with insurance claims.

The headline in the Vancouver Sun and many other Canadian newspapers is blunt: "Canadian health system more efficient than U.S.: Study".

Behind the bold assertion is research from Cornell University and the University of Toronto, published this week in the journal Health Affairs. The study found, according to its abstract:

… physician practices in Ontario spent $22,205 per physician per year interacting with Canada’s single-payer agency—just 27 percent of the $82,975 per physician per year spent in the United States. US nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans—nearly ten times that of their Ontario counterparts.

The culprit, according to University of Toronto assistant professor Dante Morra: The amount of time that must be spent on authorizations and billing due to the multitude of different U.S. health insurers, each with different standards and practices. He said, according to the Sun:

A lot of people (in the U.S.) actually choose not to do primary care and office-based work because the hassle factor is so high it's unbearable, and they feel they're spending very little time with their patients. This is a benefit of the way we've organized health care in Canada and it's one of the reasons why health care is cheaper here and we get better results because we don't have to deal with these multiple health plans.

But that doesn't mean the study says we have to scrap the whole thing and start over, Health Affairs blogger Chris Fleming notes. Standardization and electronic transactions are the key to closing the gap between the two countries, which if done could lead to $27 billion in total savings:

These measures would not only reduce costs but would also reduce the so-called “hassle factor” of physician and staff interruptions for phone calls that interfere with patient care, say the authors. In addition, they cite Affordable Care Act changes such as bundled payments and the creation of accountable care organizations as potentially decreasing administrative burdens over the long term.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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