Reduce Administrative Waste in the System

The modern U.S. health care system operates with extensive compliance, reporting and documentation requirements, many of which have been introduced in the past 20-30 years. While some administrative systems and costs are necessary, there is a substantial opportunity to streamline these through standardization, as well as targeted elimination of low-value third-party vendors. For example, while there is great utility in electronic health records, quality reporting metrics and cybersecurity tools, there also are substantial costs, including due to redundancies that could be eliminated. Also costly are the contracting and revenue cycle infrastructure needed to manage increasingly complex coverage, billing and prior authorization processes; as well as the advanced analytics, reporting and clinical integration across independent providers needed to implement value-based purchasing arrangements. The cost for this administrative staff and technology is now estimated at 25%-35% of all health care spending.

Actions to reduce administrative costs to improve affordability include:

• Reduce regulatory friction. Remove burden by minimizing unnecessary, outdated and redundant regulations, such as duplicative surveys and documentation requirements.
• Standardize insurance information and claims adjudication. Standardize the processes for plans and providers to request and transmit clinical information needed to adjudicate claims, improve prior authorization and complete other revenue cycle processes to eliminate duplication due to insurer variation.
• Shift patient cost-sharing collection to health plans. Shifting the collection of patient cost sharing to insurers would relieve hospitals of unnecessary administrative burden, protect the patient provider relationship and hold plans accountable for the costs they set.
• Eliminate fraud and abuse. Identify and eliminate instances of fraud and abuse, including sham providers, medical identity theft, false claims for services or equipment never delivered, misleading marketing tactics and other predatory behaviors.
• Streamline physician licensing and credentialing. Require insurers to automatically credential hospital medical staff to reduce the redundancy clinicians experience when complying with each insurer’s unique credentialing program. Standardize core licensure requirements across states, including background checks, continuing medical education and disciplinary reporting.