"We have one employee just getting radiological approvals, eight to 10 a day," he said. "That's $45,000 in salary, plus benefits, not going to healthcare. It can take us a whole day just to find out who to get the authorization from."
Glaspy called the administrative burden an "incalculable" waste. "When patients sign up with an [insurance] company, they don't say, 'Find a doctor who's good at jumping through hoops.' "
More than 30 cents of every dollar spent on healthcare goes to administration, according to a 2007 survey of insurance and medical executives. That translates to about $630 billion this year. It is nearly twice the 16.7% spent on overhead in neighboring Canada.
In California, about 21% of private health spending goes to insurance paperwork, according to a 2005 report in the journal Health Affairs. That represents $26 billion a year.
"This is a substantial cost to the system . . . and, unfortunately, those dollars don't do anything to provide care to anyone," said Christopher G. Dawes, chief executive of the 264-bed Lucile Packard Children's Hospital in Palo Alto.
Dawes said the hospital employed "well over 100 people" working on billing and collections.
"And that doesn't really talk about the hidden costs, which is the actual delivery of care -- nurses, physicians and actual providers who are spending extra time on documenting to be sure they are paid for what we expect them to do," he said.
Patients caught in the middle
Patients are often dragged into the financial tug of war.
When their bills are rejected or reduced by insurers, doctors often try to recover unpaid balances from patients, even if the amounts exceed what they are responsible for paying under their insurance plans. This practice, known as "balance billing," is being scrutinized by regulators in several states -- including California, which recently banned the practice for emergency room care.
Francine Gair of Chico, Calif., got entangled in the billing wars after she tripped over her dog in June and broke her elbow. Three days later, doctors put a 4-inch metal plate in her arm. Gair, 62, a freelance writer, thought she was free and clear after paying the $4,000 deductible on her health plan. The surgeon and the outpatient center where the operation was performed were both in her Blue Shield of California network.
But even before she had her stitches removed, she was surprised to receive a $1,200 bill from the anesthesiologist. He informed her that he had dropped out of the network.
