The debate over health care reform in recent weeks has produced much heat but little light. Leaving aside the hyperbolic talk of villains and mandatory euthanasia, the true debate over health care reform centers on finding areas to do things more efficiently in America's multi-trillion dollar health care system.
California Public Interest Research Group (CALPIRG) a California-based consumer advocacy group has released a report citing insurance IT and billing as primary spots of inefficiency.
Yet, the report, "The $3 Trillion Question: What Health Care Reform Can Save For Families, Businesses and Taxpayers," doesn't fault individual insurance companies but instead bemoans missed opportunities and prescribes broad, systemic remedies. The report, authored by Michael Russo, sees the biggest opportunity for savings in billing.
"Replacing the profusion of different forms and codes with a single, uniform process, and connecting providers and payers in an electronic network that does not rely on paper-based records, has been proven to increase efficiency and decrease costs," it states. "There are an estimated 7 billion non-electronic health care billing and payment transactions per year. A very rough estimate for the potential value of streamlined billing would thus be $35 billion per year ($5 saved for each of 7 billion transactions)."
If there is indeed gold in them thar bills, there is more money to be saved in leveraging IT to eliminate mistakes and mitigate illness.
"Almost alone among American industries, for the most part health care has failed to integrate productivity-enhancing information technology systems," the report states. "Well-designed information technology systems can help close information gaps and allow data sharing for better coordination."
By alerting doctors to potential errors in prescribing or dosage, the report estimates that use of modern IT can reduce adverse drug events, helping doctors avoid 2 million adverse drug results each year and saving $3.5 billion annually. Additionally, the report touts the use of IT to help patients better manage their chronic diseases. The report tallies these and other IT-related savings at $180 billion over ten years.
Other recommendations in the report may not sit as well with insurers. To "incentive" insurers to prioritize quality care and reduce inefficiencies, CALPRIG suggests requiring insurers "to spend at least 85% of premium dollars on actual health benefits."
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