A Denial a Day Keeps the Doctor Away

71 Pages Posted: 14 Jul 2021

See all articles by Abe Dunn

Abe Dunn

University of Texas at Austin - Department of Economics

Joshua D. Gottlieb

University of Chicago; National Bureau of Economic Research (NBER)

Adam Hale Shapiro

Federal Reserve Bank of San Francisco

Daniel Sonnenstuhl

University of Chicago

Pietro Tebaldi

University of Chicago - Department of Economics

Date Written: July 12, 2021

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 claims’ 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 17% of Medicaid revenue to billing problems, compared with 5% for Medicare and 3% for commercial payers. 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 just as quantitatively important as payment rates for explaining variation in physicians’ willing to treat Medicaid patients. We conclude that administrative frictions have first-order costs for doctors, patients, and equality of access to healthcare.

Suggested Citation

Dunn, Abe and Gottlieb, Joshua D. and Shapiro, Adam Hale and Sonnenstuhl, Daniel and Tebaldi, Pietro, A Denial a Day Keeps the Doctor Away (July 12, 2021). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2021-80, Available at SSRN: https://ssrn.com/abstract=3885053 or http://dx.doi.org/10.2139/ssrn.3885053

Abe Dunn

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States

Joshua D. Gottlieb (Contact Author)

University of Chicago ( email )

1307 E. 60th St.
Chicago, IL 60637
United States

HOME PAGE: http://www.gottlieb.ca/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://papers.nber.org/authors/joshua_gottlieb

Adam Hale Shapiro

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States

Daniel Sonnenstuhl

University of Chicago

1101 East 58th Street
Chicago, IL 60637
United States

Pietro Tebaldi

University of Chicago - Department of Economics ( email )

1126 E. 59th St
Chicago, IL 60637
United States

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