Health care sometimes can make patients feel as if they’re buried in red tape and mountains of paperwork. But a new set of standards, if adopted, could make those burdens disappear, and save the field billions in the process.
The American Hospital Association just released a new TrendWatch report Friday, exploring the need for administrative simplification in hospitals. Executives can do so by a adopting a series of transaction standards from HIPAA, which enable hospitals and health plans to communicate with one another electronically.
Benefits of such simplified interaction between providers and payers include timely sharing of meaningful patient data, reducing paperwork and achieving greater efficiency, according to the report. The U.S. health care system spends some 15 to 32 cents of each dollar on administrative costs that could be streamlined through the new HIPAA standards. And the system would save about $8 billion from full implementation, with $7.2 billion of that going back to providers.
“The health care system stands to save significantly by fully embracing electronic transmissions,” the report states. “Much has been done to simplify the administrative processes and provide common standards; however, much more needs to be done to increase the routine use of the standards across the system and improve the reported information.”
Hospital executives can take seven specific steps to “bend the adoption curve for administrative simplification”:
- Consolidate administrative processes to achieve economies of scale.
- Recognize the steps in financial management as a set of interrelated processes.
- Address the interrelatedness of clinical and financial data.
- Cultivate a relationship of trust between providers and health plans.
- Move fully to electronic processes.
- Eliminate redundancies in the financial process by replacing manual paper and phone-based legacy processes in health plans by replacing these with automated routines.
- Change what you can.
- Work collectively to promote administrative simplification.
The TrendWatch report also offers a few success stories of health systems that have implemented the HIPAA standards and seen efficiency skyrocket while costs dropped. San Francisco-based Dignity Health system, for one, has been able to reduce the time it takes to submit a claim to a health plan to just two or three days, and expects it to drop to just one day by using electronic processes to ensure accuracy and completeness. Nashville-based HCA, meanwhile, has experienced a 70 percent reduction in processing costs by using electronic fund transfers, rather than paper checks, according to the report.