AHA urges hospitals to cut administrative tasks, red tape

Hospitals must cut down on paperwork and other bureaucratic exercises that can cause healthcare costs to rise, the American Hospital Association said in a new report

Instead, it suggests hospitals convert many of these processes to an electronic format, particularly for benefits eligibility verification and other processes tied to quicker reimbursement for care.

"It is estimated that the U.S. healthcare delivery system spends 15 to 32 percent of each healthcare dollar on the types of administrative costs that would be streamlined through the adoption of the HIPAA transactions standards and operating rules processes," the AHA said in the report.

A 2010 report noted that widespread use of fully electronic health transactions and management could save as much as $261 billion over the next decade. In 2012, new federal rules governing electronic funds transfers were estimated to save nearly $1 billion a year on their own.

The use of electronic transmission could also aid in providing greater price transparency for patients, who are under more cost pressures to shop around for their care, the AHA said.

"Patients want to know what a service will cost and whether it is covered by their insurance. Essential to a hospital's ability to provide accurate price information are communications with health plans that verify eligibility and coverage for a given treatment," the report said. "With that information at hand, hospitals can...work with patients to find alternative payment or coverage arrangements."

However, the report noted that there are many obstacles to widespread administrative simplification, including the uneven compliance requirements under HIPAA.

The report urged hospital executives to push for the changes required for greater administrative simplification, including working with vendors, pushing the finance department for more price transparency and encouraging more cultural change within the hospital setting.

To learn more:
- read the report (.pdf)