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Let’s Tackle Administrative Waste

By Sanjiv Mehta

Note: Guest blogger Sanjiv Mehta is a fourth-year medical student at the University of Pennsylvania’s Perelman School of Medicine. He served as PAMED’s second health policy intern during October.

I had an eye-opening experience in organized medicine and an opportunity to connect with many physician leaders at PAMED’s House of Delegates. While there was plenty of debate and progress made on pertinent issues, including medical marijuana, LGBT health disparities, and graduate medical education policies, I particularly valued shared physician experiences on issues that were not necessarily addressed through house resolutions.

I was particularly interested in the discussions on the frustration of dealing with the bureaucracy that has become inherent in health care. Even as a medical student, I have witnessed this burden on the health care system.

My attendings are frequently frustrated by an unnecessarily complex process to authorize medications or to find covered long-term care facilities for our patients. Similarly on the outpatient side, I witnessed small clinics devoting significant staff, time, and resources to simply manage billing and rejected insurance claims.

As a soon-to-be resident and one day practicing physician, I am hopeful that this will change!

A number of physicians during the House of Delegates emphasized that these are clearly uncertain times in medicine. Yet, they also emphasized that this uncertainty is cause for excitement and an opportunity for physicians to drive real transformation.

The demand for improving quality and value is central to the uncertainty in our field and also crucial to driving most change. Clinical care has been transformed by legislation and policy on new methods of payment and care delivery as well as the utilization of EHRs and meaningful use criteria.

At the center of these initiatives is the continual goal of removing wasteful spending and improving efficiency.

Upwards of 20 percent of medical expenditure can be classified as unnecessary expense. Eliminating this waste not only improves quality but also reduces cost. While much of the focus has been on overtreatment, inefficient coordination of care, and ineffective pricing, the waste related to administrative complexity always seems to get shortchanged in systemic changes despite contributing one-fifth of unnecessary expenditure.

Administrative waste, due to the complex bureaucracy that varies from payer to payer, drives unnecessary overhead costs, endless physician frustration, and distractions from clinical care! This waste on billing and insurance activities could exceed $183 billion per year.

What I struggle to understand is why this cost hasn’t been addressed more aggressively.

Administrative waste is the low hanging fruit on the spectrum of addressing health care spending and has clear benefits for the physician-patient relationship. Physicians are aligned on this issue as it would reduce unnecessary spending, remove one of the worst aspects of current practice, and, more importantly, give physicians more time to actually care for patients.

Patients also benefit from the increased savings passed on to them and the decreased paperwork and bureaucracy that get in the way of their medical care.

Finally, I would argue that even payers could benefit from a reduction in their expenses by reducing friction and bureaucracy in their payment system. Simple changes like creating straightforward, uniform payment processes and paperwork could go a long way to affecting the larger system.

PAMED has certainly taken steps to address some of the complexity. They have advocated for increased transparency, improved credentialing processes, and changes in prior-authorization procedures.

Still there is so much more that could be done through organized medicine to remove paperwork and bureaucracy from the physician-patient relationship.

I am excited by all the work that organized physicians and health systems have done to improve quality and reduce unnecessary treatments in medical care. I think we should apply the same efforts to improve the quality and reduction of unnecessary processes in health care bureaucracy as well.

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