Follow the evidence

In recent years, healthcare providers have been urged to embrace evidence-based medicine, to use existing data to deliver high-quality, appropriate and necessary care, while avoiding useless and even harmful interventions. This would improve outcomes and reduce healthcare expenditures.

Studies have shown that as much as 11% of the care rendered in America represents overuse. Such care is not good for patients, and adds to U.S. healthcare spending every year. To aid in achieving evidence-based medicine, $1.1 billion has been added to the federal budget for comparative-effectiveness studies.

Unfortunately, the discussion of using evidence has stopped short of the mark. To date, we have exclusively looked at the delivery side of the healthcare equation, while nobody is sounding a call for reform on the administrative and regulatory side of the equation. As we reform our health system, the time is right to demand evidence-based, coordinated regulation and administrative rules.

There are data demonstrating that administrative costs consume between 18% and 25% of the U.S. healthcare dollar. However, cost is likely a significantly low estimate, because it does not include the costs that hospitals and other healthcare providers incur in complying with government and other regulatory bodies' administrative rules and regulations.

While the Congressional Budget Office creates detailed estimates of the cost to the federal government of changing the delivery and payment systems, it does not look at the cost of new federal regulations and guidelines to providers.

The CMS is just one of more than a dozen federal organizations that promulgate rules and regulations for healthcare delivery systems. These regulations cover virtually every process: from the minute details of billing to direct patient-care processes, laboratory and radiology tests, workforce rules, building specifications, investments, research and waste disposal. The number of these rules and regulations each organization issues is staggering. Medicare has 12,000 pages of billing rules alone. Entire industries have sprung up to help hospital and physician billing clerks ensure that billing is correct and that errors do not lead to costly investigations for fraud and abuse.

State and local governments also promulgate additional sets of regulations for healthcare organizations, including those that mirror federal organizations such as Medicaid and the State Children's Health Insurance Program, and those that regulate professional disciplines such as medical examiners and nurses.

There is a similarly large array of national organizations with various ranges of control that implement even more regulations, standards and guidelines. Some of these focus on patient safety and quality. Currently there are at least 21 organizations that have promulgated more than 3,000 quality measures.

Some organizations focus on accreditation like the Joint Commission, whose 442-page manual and 1,677 performance standards add to the 370-page CMS hospital standards manual. There are 26 boards that dictate post-graduate training of physicians, and others that dictate the training of medical students. One of these organizations, the Accreditation Council for Graduate Medical Education, recently has been considering new resident work-hour rules that are estimated to add $1.6 billion in costs with unclear outcomes. The rules are overwhelming, at times conflicting, and even self-serving.

There is no systematic integration across organizations or central oversight to identify duplicative, overlapping or contradictory rules, nor is there any cost-benefit standard for this confusing array of regulations and rules.

Added to all these regulatory bodies are the administrative burdens imposed by the insurance companies, each of which demands its own version of pre-authorization, claims adjudication and payment mechanisms.

The direct cost of compliance diverts dollars from direct patient care. This includes, but is not limited to, the costs of enrollment departments to help patients navigate applications for public programs, billing and coding quality assurance, internal auditing functions, integrity and compliance departments, privacy and health information security departments, departments of regulatory oversight, departments for patient quality and safety, and training departments in an array of disciplines—none of which is rolled up into the 18% to 25% estimate of administrative costs.

The cost goes beyond dollars to the impact on real patient care. The diversion of hospital nurses from bedside care to documentation tasks has been estimated by some at 30% of their time. Physicians in office practices are known to be discouraged by mountains of paperwork.

Thus far, the healthcare discussion has focused on providing healthcare coverage for Americans who are uninsured or underinsured, on providing improved quality of care and on reducing the ever-growing and nationally debilitating cost of healthcare. Yet, the discussion has included little attention to the regulatory and administrative components that encumber and demoralize providers and add enormous costs—often without defined value to our healthcare system.

Should we not use this period of reform to create evidence-based regulation and administration to match our evidence-based medicine? Should we not demand coordination of regulation just as we are demanding coordination of patient care? Should we not free providers from negotiating the maze of siloed regulations? Isn't it time to simplify the regulatory aspect of healthcare? This is reform that everyone would embrace, and it will help us pay for our true goal—universal healthcare for all Americans.

Patricia Gabow, a physician, is CEO of Denver Health, an integrated public safety net healthcare system.

What do you think?

Write us with your comments. Via e-mail, it's [email protected]; by fax, 312-280-3183.