Imagine walking into a coffee shop and ordering the same latte you do every day. Some days you’re charged for a small, other days for a medium, and sometimes for a large, even though you ordered the same drink each time.
That’s not very different from how clinicians bill for their work.
We’ve looked at data across many different health systems. And without exception, clinicians doing the same job, seeing the same mix of patients, consistently bill at very different service levels. Some habitually land at the lower end of the complexity scale. Others consistently hit the higher end; they’re not gaming the system, their documentation just supports it.
Same hospital. Same role. Wildly different financial outcomes.
The hidden (billing) variation inside every organization
Some interesting themes emerge in our analyses across multiple health systems:
- A meaningful percentage of clinicians consistently bill several standard deviations below peer averages
- The gaps don’t close when you control for patient acuity and service line
But here’s an important data point:
In a billing assessment study of residents and staff physicians, 79%–87% of respondents reported 0 hours of formal billing instruction during residency training.
That’s not a knock on anyone. Residency is about learning medicine. But it means most clinicians figure out billing on their own, picking up habits from whoever trained them, shaped more by local culture rather than actual standard. Those habits stick, and over time, this becomes invisible.
The difference is small, until it isn’t
The dollar gap between adjacent E/M codes isn’t dramatic — maybe $15 to $30 per encounter for a hospitalist. Easy to shrug off. But over the course of 1,000 encounters that a clinician might see in a year, that amounts to $25,000 per clinician. Now scale that across a 100-member hospitalist group: the opportunity can approach $500K to $1M per 100 clinicians per year. Not from fraud, not from overworking anyone, just from addressing variation in billing knowledge.
Why variation persists
Many organizations attempt to address this with mandatory billing lectures, annual compliance training, and coding tip sheets. These help, but variation often persists.
Why? Because billing is subjective, and most clinicians would assume they’re “about average.” In reality, the spread between the 25th and 75th percentile billers in the same group can be substantial.
The power of peer comparison
Variation is defined by figuring out what’s “normal” and what’s an “outlier”. Showing people where they stand relative to their peers highlights outliers. Behavioral economics has a name for this, social norming, and it’s surprisingly effective in clinical settings. When physicians see their own patterns benchmarked against risk-adjusted colleagues, things shift. Often faster than you’d expect.
Importantly, this isn’t about pushing everyone to bill higher. It’s about three things — educating on what qualifies for different billing codes, supporting documentation that accurately reflects the work done, and ensuring clinicians get credit for the complexity they’re already managing.
“My clinicians are too busy to worry about billing feedback”
Here’s the hard truth: operating margins at health systems across the country are razor-thin and sometimes negative. Leadership has to choose between asking clinicians to see more patients or getting smarter about what is already happening. Improving billing accuracy is a powerful “work smarter, not harder” lever.
If you’re curious what the opportunity size looks like in your system, please reach out. We’re happy to help you measure it.
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