The price of medical care, including services, insurance, drugs and medical equipment, has increased 115% since 2000, according to U.S. Bureau of Labor Statistics data. Meanwhile, the cost of all other goods and services only increased by 78%. The result of the most recent increases? For 38% of Americans, this meant delaying medical treatment due to cost according to a recent Gallup poll, up from 26% in 2021.
Amidst the ongoing cost-of-living crisis and healthcare worker shortage, how can medical care providers and payers help alleviate this strain on the American people and better enable access to affordable care? It starts with eliminating administrative waste.
Health Affairs reports that between $285-570 billion of medical spending each year is attributed to administrative costs. While not all administrative spending should be considered “waste,” approximately half of these costs are unnecessary. Reducing this waste lessens burdensome processes for payers and providers, lowers overhead and eliminates costs that would be ultimately passed on to patients.
The benefits of eliminating administrative waste are clear. The cost of labor is the most measurable part of the wasted cost equation, and the cost of frustration of patients, providers, and payers cannot be ignored. The only question remains is how can it be done?
Collaboration
To reduce administrative waste, payers must work alongside providers to improve their efficiency. By identifying the opportunities to implement automation, providers extend their workforce by reducing their workload which results in lowered overhead.
The only way this strategy succeeds is by improving trust and transparency between payers and providers. While this relationship has historically been complicated, working together is in the best interest of patients, as Health Affairs found that 28% of administrative waste could be eliminated through collaboration in their recent study.
Enabling Automation
Beyond easing the data sharing process, Provider Network Management also enables automation of many cumbersome, time-consuming administrative tasks. Through cloud-based platforms and AI technology, these tools organize provider data in real-time to ensure data is as accurate as possible. This is especially notable as The Centers for Medicare & Medicaid Services have noted that most provider directory data is roughly 50% inaccurate. Provider directory accuracy is powered by robust processes for provider onboarding, credentialing and contracting.
Managing the relationships of payers with their providers can be complex and unwieldy. The critical processes of provider onboarding, contracting, and credentialing and the ongoing data maintenance make these critical processes time consuming and complex – especially when done manually. Provider Network Management tools help to automate this workflow while easing the burdens associated with seemingly ever-changing regulatory frameworks. This effective management helps health plans avoid hefty fines and penalties incurred when provider directory data is out of date.
Automation can also help providers manage prior authorization, claims and billing processes, while also helping schedule, remind and intake patients.
Data Integration
Payers and providers have access to distinct types of information on providers and patients. Payers tend to have access to historical data from the claims they’ve received over extended time periods. Providers have access to the detailed specific clinical and financial data from their patients and the most up to date data on providers in their networks that are serving these patients. As this healthcare data continues to grow exponentially, data integration can be used to create better data-driven processes. However, it is currently siloed – making it difficult to use for payers and providers to collaborate.
When data is shared, providers can better and more quickly understand insurance cover for their patient based on the procedure and the practitioner providing serves. Surprise billing and uncompensated care can be reduced or eliminated, and this results in a simpler and more transparent system for all – including patients. Provider Network Management systems provide many of the basic building blocks to help enable these strong relationships.
Once the relationships and connections are established, providers and payers will be able to more easily achieve mutually desired outcomes while patients reap the benefits of higher-quality, lower-cost care.
Administrative waste is costly and burdensome on the American health care system for patients, providers and payers. As inflation continues to rise, it is crucial that the multi-trillion dollar US healthcare industry do its part to cut existing costs while also preventing further unnecessary increases.
With nearly half of U.S. adults describing affording their health care as somewhat or very difficult, according to Kaiser Family Foundation, it is time to make a change for the better. Through collaboration, data integration and automation, provider network management and other cloud-based tools help to enable efficient processes and promote strong, beneficial relationships between payers and providers.
The result? Quality healthcare that is efficient and cost-effective for patients.
Tammy Hawes
Tammy Hawes is Virsys12 Founder and CEO.
