The U.S. healthcare system has lots of established electronic network connectivity between caregivers and insurance companies, but adoption of various types of electronic transactions remains very uneven, says a new study from the Council for Affordable Quality Healthcare.
Each year out of total spending of about $3.20 trillion, the U.S. healthcare system spends as much as 14% of that money, or up to $448 billion, on administration, says the Center for Medicare and Medicaid Services. Greater use of web-based digital healthcare portals and other forms of electronic networking, such as electronic data interchange, could save the U.S. healthcare system as much as $9.4 billion annually, says the Council for Affordable Quality Healthcare, a Washington, D.C., healthcare research organization. Electronic data interchange is the computer-to-computer exchange of business documents in standard formats.
The use of electronic networking by the healthcare system remains uneven and varies widely by type of transaction. For example, nearly 94% of healthcare claims were submitted electronically by healthcare providers to insurers in 2015, the last full year for which data was available, says the Council for Affordable Quality Healthcare. In contrast, only 74% of all dental claims in 2015 were submitted for processing electronically, the organization says.
Electronic healthcare transaction processing has the potential to be much more affordable than paper and phone healthcare administration, according to the study. For example, conducting manual transactions costs U.S. health plans and healthcare providers as much as $11 per transaction compared with about $6 for an electronic transaction, the council says.
The Council for Affordable Quality Healthcare study measures the adoption rate, costs and labor associated with the most common administrative transactions conducted between health plans and providers. These include verifying a patient’s insurance coverage, sending and receiving payment, inquiring about the status of a claim and obtaining prior authorization for care.
Hospitals, physician group practices and other providers now spend 8 minutes on average, and up to 30 minutes on manual tasks, which include making phone calls, sending faxes and mailing correspondence, says the Council for Affordable Quality Healthcare. In particular, electronic transactions for prior authorization offers providers the greatest time savings potential if conducted electronically, reducing the time per transaction from 20 to 6 minutes and the cost from $7.50 to $1.89, says the Council for Affordable Quality Healthcare.
In 2015, healthcare providers exchanged about 4.84 billion electronic healthcare transactions through web portals and electronic data interchange networks to payers, although the Council for Affordable Quality Healthcare didn’t break out numbers for the previous year. Those transactions included about 2.4 billion eligibility and benefits verification transactions, 1.48 billion claims submissions, 489 million claims status inquiries, 173 million claims payments, 173 million remittance advice transactions and 48 million claims attachments, among other transactions, the council says.
The use of specific types of transactions varies widely. 76% of eligibility and verification and 63% of claims status inquires are now done electronically. In comparison, only 18% and 7%, respectively, of prior authorizations and referral requests are processed through a web portal or EDI network.
The potential for administrative savings in healthcare is big—if healthcare insurers and providers do more consistently transact electronically all types of transactions, the study says. The dental business has the biggest gains to make, according to the council. Adoption of the four electronic transactions measured for commercial dental health plans was on average 30% lower than adoption by commercial medical health plans, says the Council for Affordable Quality Healthcare.
“This gap presents a significant savings opportunity for the dental market,” the study says. “Full electronic adoption of the transactions studied could save dental health plans nearly a half billion dollars and dental providers more than $1 billion in labor costs.”
Date: January 16, 2017