Reducing administrative red tape by just 10% could remove as much as $500 billion over 10 years from the nation's healthcare costs, a Healthcare Administrative Simplification Coalition report released today estimates.
The report, Bringing Better Value: Recommendations to Address the Costs and Causes of Administrative Complexity in the Nation's Healthcare System, issued by the Healthcare Administrative Simplification Coalition, found that about 25% of healthcare spending in the United States goes toward administrative functions. Much of that paperwork is duplicative and little of it has been standardized. While conceding that some administration is needed to manage a healthcare system, the report found that current levels of complexity divert too much time and money from clinical care to administrative processes.
"Every dollar spent on a convoluted, redundant or unnecessary administrative process is a dollar poorly spent," says William F. Jessee, MD, president/CEO of the Medical Group Management Association, an HASC member. "We spend more on healthcare than any nation in the world, but we're getting far less than full value for our investment, partly because of unnecessarily complex administrative processes."
HASC, which includes physician and hospital organizations, health and benefits plans, employers, government agencies, and other groups, has called for voluntary and nationally coordinated changes to reduce red tape in healthcare billing and payment processes.
Today's report recommends:
- Credentialing physicians and other clinicians – A universal credentialing form would eliminate hundreds of hours of repetitious paperwork that physician practices now devote to completing multiple credentialing forms for insurance payers, hospitals, and others.
- Determining and verifying patient eligibility for health insurance – Adoption of an industry-wide standard for interchangeable electronic data would help hospitals and physician practices determine each patient's insurance coverage more quickly and accurately.
- Standardizing healthcare patient identification cards – Standardizing the design and content of patient ID cards, and ensuring they are machine-readable, would significantly reduce costly errors and delays in the medical claims billing process.
- Improving coordination of prior authorization processes for radiology and pharmacy services – A voluntary, standardized approach to how providers request and receive determinations of patient eligibility for pharmacy benefits and radiology services would reduce treatment delays and reduce costly paperwork.