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Kai Ryssdal: Today we're going to start an occasional series called The Cure. About the remaking of the American health-care system. Where the real costs are. And the savings, too. Up first, the inner workings of a typical medical practice. Did you ever wonder, for instance, what all those people on the other side of the counter are actually doing? And why there are so many of them? We sent Marketplace's Tamara Keith to find out.
TAMARA KEITH: It's one of the first questions a new patient hears when they come into a doctor's office.
DOCTOR'S OFFICE: May I go ahead and copy your insurance card and driver's license please.
These days, dealing with insurance is a huge part of any medical practice. A recent Cornell study found nationwide it costs doctors $31 billion a year to deal with insurance companies. That's about 7 percent of all spending on physician and clinical services.
At Ortho Bethesda, an orthopedic practice in suburban Washington D.C., there are eight doctors on staff, and 14 people in the business office.
SHARISSA DYKE: Hi Rob. My name is Sharissa, and I'm calling to verify medical benefits for a patient.
Sharissa Dyke is an insurance verifier at Ortho Bethesda. She basically spends every day checking whether patients have insurance and what their plans cover.
DYKE: Is authorization required for outpatient MRI?
OFFICE WORKER: No ma'am.
DYKE: And who do we send claims to?
Ortho Bethesda deals with more than a dozen different insurance companies. They all have different systems for filing claims. And each company has a bunch of different plans, each with varying co-pays and deductibles and rules about whether pre-approval is necessary. This keeps the business office busy and irritates doctors and patients.
DOCTOR: She's Aetna, and she had acute injury to her knee a week ago.
A doctor walks into the business office with a patient's chart and a sense of urgency.
DOCTOR: And she needs an MRI to evaluate for a PCL tear. And I'm not sure if her flavor of Aetna needs authorization.
The MRI will help determine whether the patient needs surgery. Sometimes it can take several days and lots of paperwork to get approval from the insurance company. Other times, it's 15 minutes on the phone, only to discover.
OFFICE WORKER: Based on the information provided this particular Aetna member's plan does not require pre-authorization for service at this time.
This drives Dr. Edward Bieber crazy. He is the managing partner at the practice and an orthopedic surgeon.
Dr. Edward Bieber: It's time consuming, it's expensive to our office, and it takes up a great deal of my time that I would like to spend giving care to the patients rather than shuffling their papers.
Bieber says he's never had an insurer deny an MRI, so why all the red tape. But insurance companies say requiring approvals cuts down on unnecessary tests. MRI's cost somewhere between 500 and a few thousand dollars depending on the type. Susan Pisano is with America's Health Insurance Plans, a trade group.
SUSAN PISANO: High-tech imaging is being greatly over used and misused. It affects out of pocket costs for consumers. It affects premiums. It affects quality and safety.
Pisano agrees doctors shouldn't have to deal with so many different billing systems. She says her industry is working on it. Later this year her group will test an online system where doctors can access information and use standard forms for all of the insurance companies in their region.
PISANO: The estimates suggest hundreds of billions of dollars could be saved if everybody is using the same rules.
The American Medical Association, which represents doctors, is trying to get some of that provision written into new health-care legislation.
But that alone won't eliminate a huge source of back-office costs: Dealing with a multitude of insurance companies who each have different rules for which procedures they will cover and how much they will pay. Until that changes, there will continue to be more office workers at Ortho Bethesda than there are doctors.
In Washington, I'm Tamara Keith for Marketplace.