The healthcare industry can save billions of dollars a year without government oversight or financial inducement just by doing what other industries already do to cut costs, according to a report by the Healthcare Administrative Simplification Coalition.
The 26-page report,
Bringing Better Value: Recommendations to Address the Costs and Causes of Administrative Complexity in the Nation's Healthcare System, is based on a summit meeting of multiple healthcare industry organizations held last November in Washington, but the report was not ready for publication until its release last week, according to William Jessee, president and CEO of the Medical Group Management Association, which is one of the founders of the coalition.
“With an organization that has the kind of diversity we have, it took a lot of drafts and back-and-forth conference calls,” Jessee said.
The report also was short on calls for getting the government involved in mandating the recommended changes. This was partly because of an effort to achieve consensus among coalition members, Jessee said.
One of two exceptions to that general rule involved a call for the CMS to develop a link for the communication of provider-credentialing information between the Medicare Provider Enrollment, Chain and Ownership System and the Universal Provider Datasource, a computerized credentialing tool developed by the Council for Affordable Quality Healthcare, or CAQH.
The coalition “encourages the universal use” of the tool to simplify credentialing by health plans and hospitals—one of its four main goals.
The other exception was a call for the CMS to fund and develop a pilot program for standardizing machine-readable health identification cards for Medicare beneficiaries, part of a broader recommendation to use the cards to simplify patient-eligibility checking, which is another goal. The coalition also made several recommendations with an eye toward the goal of standardizing prior-authorization processes among health, radiology and pharmacy-benefit plans.
In addition, the HASC urged health plans, claims clearinghouses, vendors of practice-management systems and electronic data interchanges to certify to the data communications standards of the CAQH Committee on Operating Rules for Information Exchange, its fourth goal.
The coalition didn't estimate bottom-line savings if all 16 recommendations among the four goals were universally adopted, but it did estimate that even what it described as a “modest” improvement—a 10% “optimization” of administrative processes and technologies—would trim about $500 billion in healthcare costs over 10 years.
Much of the current healthcare reform talk—particularly involving the American Recovery and Reinvestment Act of 2009's call for “meaningful use” of electronic health-record systems—centers on clinical change and quality improvement, which, Jessee said, “will be hard.” However, the savings from changing business-process administration “is fairly simple and could be done quickly, especially with some encouragement through legislation,” he said.
For example, Colorado and Texas have mandated the use of standardized health insurance identification cards.
“We're not talking about a smart card with a chip in it,” Jessee said. “We're talking about a pretty stupid card, no smarter than my driver's license,” which has basic demographic information such as the cardholder's name, address and date of birth, printed on the front and encapsulated in a standardized format in a bar code on the back.
Jessee said he recently went to a UPS center to claim a package and the woman at the counter asked him for his driver's license.
“I thought she was going to read it, but she just swiped it,” Jessee said. “It goes right into their system, which shows where the package has been routed. A lot of people have mastered this technology and used it to squeeze out costs. There's no reason we can't do it in healthcare.”
A version of this story initially appeared in this week's edition of Modern Healthcare magazine.
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