The amount of time and money physicians and their staffs spend on the administrative tasks of medicine is astounding. A recent perspective article in the New England Journal of Medicine quantifies it this way: “The average physician spends 43 minutes a day interacting with health plans about payment, dealing with formularies, and obtaining authorizations for procedures,” and physician practices hire coding and billing staff “who spend their days translating clinical records into billing forms and submitting and monitoring reimbursements.”
That translates to an annual cost of $361 billion spent on health care administration, and half of these expenditures are unnecessary.
The authors argue that standardization is key to reducing administrative costs, and much of this can be achieved through health information technology and electronic health records. Though they say the only entity with the “clout” to push through standards in medical transactions is the federal government, measures in the Affordable Care Act and the Health Information Technology for Economic and Clinical Health Act (HITECH)—like instituting regulations on payers and providing incentives to physicians and facilities—may start us on the right path when previous efforts have failed.
It also helps that other physician groups are championing the cause. At the interim meeting of the American Medical Association held last week in Hawaii, the Colorado Medical Society presented and passed a resolution that directs AMA to advocate for more automation, standardization, and simplification of administrative tasks between payers and providers including claims transactions, prior authorization, and verification of benefits at the time of service. The resolution also directs AMA to expand their Heal the Claims Process campaign, which aims to reduce the cost of managing the claims cycle to 1 percent of revenue.
The challenge is that any reforms take time—for physicians to implement the systems that will potentially reduce administrative burden—and money—through paid staff and lobbying to legislate changes to a complex system. Both of which are in short supply.