Make administrative simplification the first step on path to comprehensive health reform
Republican efforts to repeal and replace the Affordable Care Act are in disarray. And the reality is that no comprehensive approach to healthcare reform has the support needed to pass in this deeply divided Congress. So the search has turned to “skinny” or more-limited solutions.
Desperately needed administrative simplification of the rule-bound U.S. healthcare system would be the perfect solution. It could give an important shot in the arm to American medicine and provide an easy political win for the beleaguered Congress.
Healthcare accounts for almost 18% of the nation’s gross domestic product, and, by some estimates, 30 cents of every healthcare dollar goes to administrative costs, double the amount spent by most other nations. Eliminating administrative waste represents the most obvious and immediate opportunity to lower unnecessary healthcare spending, the Achilles’ heel of our medical system.
Today doctors and other clinicians in the U.S. fight less against disease and more against a massive sea of red tape. Getting care often depends not on a clinician’s skills but on their knowledge of (and the time for) the workarounds made necessary by our byzantine system.
Getting paid for a simple office visit today is more complicated than the visit itself. Federal regulations dictate that just to calculate the amount a doctor can charge for an appointment, he or she must use a bizarrely complicated formula, counting the number of body parts discussed with a patient, the number of body parts examined, and estimating the complexity of their medical decisionmaking. This “evaluation and management” (E/M) coding system is overkill on the level of what we did to the buffalo in the 1800s.
A claim for a typical Medicare patient’s office visit (which pays an av- erage of $75) can go to a half-dozen places—addressing deductibles, copays, primary insurers and secondary insurers—before it is finally paid or, just as easily, rejected. Each step is an opportunity for an error, a discrepancy or a denial, all of which are common. The system creates waste on a massive scale and invites fraud.
Getting prescriptions and simple tests for patients can take hours of work because of insurers’ prior authorization requirements. One recent Friday evening I received an after-hours phone message from a patient with Type 1 diabetes who was running out of insulin. The prescription was held up in prior authorization. The patient had been on the same insulin for years and needs it to survive. In all, it took approximately a week to get the medication approved. This needlessly complicates treatment and endangers lives.
Here is the fix: All new CMS administrative programs should be put on hold until true administrative simplification takes place. They must wipe the slate clean to cut unnecessary spending so healthcare professionals can focus on providing and improving patient care.
To begin, all aspects of getting paid for medical care should be dramatically simplified. The E/M coding system mentioned above must be overhauled. Most medical billing for simple office services and procedures should be eliminated entirely in favor of pointof-care payment strategies, such as healthcare payment cards (a debit card perhaps) for all types of payers. Prior authorization processes should be reserved only for extraordinary tests and treatments. Even then, they need to be streamlined and straightforward.
There are plenty of other potential areas for administrative simplification, including a universal website where all patient and provider insurance information, and professional licenses, certifications and credentials are maintained and can be securely accessed. A unified set of rules and forms should be established regarding all such things. And the notoriously complex HIPAA privacy and security rules would be far more effective if they were far simpler.
Meanwhile, the Medicare Access and CHIP Reauthorization Act, the government’s new “value-based payment” system, makes no sense in the current environment, because it actively prevents value on multiple fronts.
These types of improvements can be incremental, but administrative simplification represents an important reform that would dramatically improve the American healthcare system right now and could be the bridge to more comprehensive reform down the road. And it could just be the win that Congress and the American people need right now.