How Automation Technology Could Cut $8 Billion in Healthcare

One method for better managing the revenue of a hospital and reducing wasteful spending is to reduce manual administrative processes and incorporate automation technology. The 2015 CAQH Index shows that the healthcare industry is needlessly spending more than $8 billion every year on manual administrative work for simple procedures, according to a company press release.

The CAQH Index looks at the cost savings and adoption rates of electronic HIPAA business transactions and automation technology among health payers and providers in comparison to manual administrative processes.

The type of manual transactions that occur across the healthcare industry include mailing checks and claims as well as making phone calls to verify patients’ health insurance plans.

“With this solid understanding of where we are today, our industry has a real opportunity to fill some of these gaps and improve operations by sharing best practices,” John Bialowicz, Manager of Electronic Business Interchange Group at Blue Cross Blue Shield of Michigan, stated in the press release. “The Index clearly illustrates the value of transitioning to fully electronic transactions.”

During a webinar called 2015 CAQH Index® Findings: Healthcare Industry Trends in Electronic Business Transaction Adoption, Costs and Savings, Raynard Washington, Senior Manager of Research & Measurement for CAQH, among others spoke about the results from the report and the advantages of automation technology.

“The Index is an annual survey of both commercial health plans as well as healthcare providers,” Washington began. “For health plans, we include individuals with group coverage as well as managed Medicare and Medicaid and commercial insurance companies.”

March 31, 2016 - 

“Just to give some context, the [report] is [based on] nearly 5 billion transactions for medical and dental plans,” he clarified.

“We are a nonprofit alliance focused on streamlining the business of healthcare and we do that through initiative that deliver value to providers, patients, and health plans,” Gwendolyn Lohse, Deputy director at CAQH, stated during the webinar. “For all of these initiatives, there’s significant market support and involvement on a multi-stakeholder level.”

“The Index is the only industry source that’s tracking on an aggregate level full adoption of electronic transaction and establishing benchmarks for both the volume and the cost,” she continued. “Without that type of tracking at an aggregate level, we really can’t as an industry identify specific opportunities for further improvement. The Index has been really working across both health plans and providers and the vendors who support them to find out how to track adoption and whether systems are in place to do that tracking and record it publically.”

“There’s a wide variety of experts to help us during the process from data analytics, data collection and also analysis and the action to make sure they fit into the product context of the industry,” Lohse mentioned.

“Why does the Index matter?” She posed the question. “I think we’re all familiar with HIPAA, which was created two decades ago. Even though that it was created two decades ago, we’re still really using manual processing for a lot of these transactions and a minimum reporting of the results to realize, as an industry, we need to do better and we need to work together to do better and to push adoption on things that do exist like best practices so we can have electronic, real-time transactions to support what needs to be a modern healthcare system.”

“The significant industry costs that are unnecessary some estimate up to $31 billion for healthcare providers sending these transactions and that really is an unneeded cost to what is already a costly healthcare system,” Lohse concluded. “So reducing that administrative burden, letting the providers and the health plans focus on the things that they really need to worry about and not the administrative piece, and then combining our work and complementing what’s happening in clinical.”

“We’re all familiar with what’s happening with meaningful use and EHRs across the board,” she mentioned. “Our administrative side should directly complement that and get the provider and the patient what they need at the time they need it.”