A Denial a Day Keeps the Doctor Away

Abe Dunn, Joshua Gottlieb, Adam Shapiro, Daniel J. Sonnenstuhl () and Pietro Tebaldi ()

No 2023-03, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: Who bears the consequences of administrative problems in healthcare? We use data on repeated interactions between a large sample of U.S. physicians and many different insurers to document the complexity of healthcare billing, and estimate its economic costs for doctors and consequences for patients. Observing the back-and-forth sequences of claim denials and resubmissions for past visits, we can estimate physicians’ costs of haggling with insurers to collect payments. Combining these costs with the revenue never collected, we estimate that physicians lose 18% of Medicaid revenue to billing problems, compared with 4.7% for Medicare and 2.4% for commercial insurers. Identifying off of physician movers and practices that span state boundaries, we find that physicians respond to billing problems by refusing to accept Medicaid patients in states with more severe billing hurdles. These hurdles are quantitatively just as important as payment rates for explaining variation in physicians’ willingness to treat Medicaid patients. We conclude that administrative frictions have first-order costs for doctors, patients, and equality of access to healthcare. We quantify the potential economic gains—in terms of reduced public spending or increased access to physicians—if these frictions could be reduced, and find them to be sizable.

Keywords: healthcare; Medicaid; physicians; insurance (search for similar items in EconPapers)
Pages: 69
Date: 2023-01-14
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.frbsf.org/wp-content/uploads/sites/4/wp2023-03.pdf Full text - article PDF (application/pdf)

Related works:
Journal Article: A Denial a Day Keeps the Doctor Away* (2024)
Working Paper: A Denial a Day Keeps the Doctor Away (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:95615

Ordering information: This working paper can be ordered from

DOI: 10.24148/wp2023-03

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().