Everyone knew the US’ Rube Goldberg healthcare system was plagued by high costs for billing- and insurance- related activities, but few would have believed it was this bad.

A recently concluded 3-year study of the matter has revealed that administrative (non-physician) costs associated with these 2 activities add up to $51,221 per FTE physician per year.

That’s not including the astonishing $34,052 per year per FTE physician to account for the physician’s own time spent on billing and insurance.

Summing the 2 brings the annual spend on these activities to $85,273 per FTE physician, or 10% of the total operating revenue for an average practice.

Approximately 0.67 FTE non-clinical personnel per FTE physician is allocated to billing and insurance, according to the study.

To reach their conclusions, Julie Sakowski and colleagues at the Sutter Health Institute interviewed business office personnel, observed office work flows, conducted budget and expense reviews and implemented a survey to assess clinician time spent on billing and insurance.

The study was funded by the Commonwealth Fund and the Robert Wood Johnson Foundation.

In a separate study just released by the Medical Group Management Association, investigators found that physicians spend about 43 minutes per workday interacting with insurance plans.

MGMA estimated that system-wide, overall staff time spent on insurance matters alone equaled $21-$31 billion per year, or $68,000 per physician per year, a number that can be reconciled with results from the above-mentioned Commonwealth Fund study.

“Minimizing billing and insurance-related activities is not the only goal of (health system) reform, (but) standardizing health plan features and processing requirements presents a tremendous opportunity for improving efficiency in a multi-payer health care system,” Sakowski told HealthCareITnews.

The Senate Finance Committee has circulated a draft health reform proposal that features an individual mandate, authorizes an expansion of Medicaid, and–hold the presses!–dumps the Big O’s pet project, a government-sponsored plan that would compete with Big Insurance.

The draft also includes scaled-back coverage provisions that limit costs associated with the overhaul.

One such provision cuts the number of middle-class folks that would qualify for tax credits designed to render insurance more affordable.

The Big O, HHS Secretary Kathleen Sebelius, and many House Democrats including Nancy Pelosi favor a public option to keep Big Insurance honest. Senate Democrats have been divided on the issue since Day 1.

In lieu of a public option, the draft proposes consumer-owned cooperatives similar in design to rural telecom and electricity providers. They would be “subject to government oversight and funded with federal seed money,” according to the Washington Post.

Meanwhile, House Democrats are divining ways to pay for the overhaul. They’re considering a Robin Hood tax on the rich, increased payroll taxes on employees, sin taxes on sugary drinks and alcohol, and a new value-added tax.

The House is also considering the Senate’s preferred approach to paying for reform, which is to tax health benefits received by Americans through their employers, as well as the Big O’s idea to limit itemized deductions for the rich.

A particularly controversial issue, according to the Post, is the extent to which employers must subsidize public coverage for employees if they don’t offer coverage to employees themselves.

People worry that if lawmakers don’t get this right, employees will flee to federal plans and send government costs through the roof.

The draft includes preliminary proposals for handling this nightmare.