Hoping to "provoke some discussion" among various interests, the Medical Group Management Association is calling for a radical overhaul of the private-sector healthcare payment system in America to remove billions of dollars of waste from all the variability, CEO William Jessee, M.D., says.
"We're hoping that this is sort of a lightning rod for some public debate," says Jessee.
The Englewood, Colo.-based MGMA wants to standardize payer contracts, clinical guidelines, physician credentialing, drug formularies and other sources of administrative redundancy while maintaining the current multiple-payer framework of the U.S. healthcare system.
The organization set forth its bold plan Monday at its annual conference in Philadelphia.
"We do not believe that the current financing and payment system can long be sustained. Similarly, we do not believe that a government-run, single-payer national health system is a viable solution to this problem," the MGMA board of directors says in a statement.
"We welcome comments on and criticism of this concept, and hope that it can contribute to the rapid identification of solutions to this immense problem," the board says.
"The problem we face is that no two payers work the same way," Jessee says. "This is sucking up a huge amount of our nation's healthcare system and it's not benefiting anyone."
According to the board statement, "This complexity diverts billions of dollars each year from the provision of healthcare services into non-value-added administrative busywork. It has severe adverse effects on patients, employers, payers, physicians and healthcare administrators."
The board endorses the concept of a "simplified payment system," which Jessee describes in a commentary in Monday's edition of Modern Healthcare (registration required). Modern Healthcare is the sister publication of Modern Physician.
Jessee expounded on his ideas in a news conference Monday evening at the Philadelphia conference.
"Why should clinical guidelines depend on who the insurance plan is?" Jessee asks. He makes a similar inquiry about drug formularies but acknowledges that pharmaceutical companies will fight any attempt to curtail their enormous profits.
Jessee also derides the practice of multiple fee schedules, saying that only healthcare and the airline industry have so many prices for the same service--and airlines set their own fares, while healthcare providers have little say in what they will be paid. He calls the MGMA proposal for a single fee schedule "perhaps the biggest lightning rod we've tossed out so far."
The MGMA executive says the HIPAA administrative simplification regulations address only a small part of the waste in healthcare and that it is time to take a broader view.
"Credentialing is probably the prototype," says Jessee. The Council of Affordable Quality Healthcare, a coalition of managed care companies and industry groups, is rolling out a one-stop credentialing program state-by-state.
He also calls the recent decision by the National Library of Medicine to license Snomed CT, a standardized set of clinical terminologies, for free nationwide usage a "step in the right direction."