We’ve often wondered where the biggest healthcare sinkhole is when it comes to lost revenue due to administrative hassles. Until now, our guess was the drain on physicians’ and hospitals’ time spent wading through mountains of authorization requests from insurance companies to get patients the care they need. (Spoiler alert: Physicians have said that this takes their offices about two days a week!)
Findings from a 2019 study at the Stanford Graduate School of Business, however, point the finger at the administrative hurdles insurers place on their members.
The Stanford researchers worked with researchers at Gallup and found that insurance-spawned sludge work costs employers and the economy a staggering amount of money every year:
- $21.6 billion lost from employees’ time spent on the phone with health insurance reps
- $26 billion in missed work due to having to deal with a benefits administrator
- $95 billion in lost productivity resulting from lower job satisfaction
So, what’s the fix? The Stanford article calls out employers for not holding insurers accountable and for cutting corners on their employees’ health plans only to lose money in the long-run due to the employees’ sludge-related travails. Which is a fair point. But on top of that, we feel it’s time insurers stop burdening everyone but themselves.
