3 ideas that could reduce health care costs by $40 billion
By Bill Jessee, MGMA president and CEO
It's no secret that health care costs are rising. In the United States this year, the Institute of Medicine (IOM) says the costs will be about $2.5 trillion – nearly 17 percent of the economy.
Fortunately, some expenses are avoidable. I recently attended the IOM workshop, "The Healthcare Imperative: Lowering Costs and Improving Outcomes," where I made a presentation about avoidable costs from delivery inefficiencies in physician offices. Changing practice operations, like changing physician practice patterns, is not easy, but by making steps in your medical practice to reduce waste, you'll help your bottom line as well as the nation's.
As a health care leader, you can control some types of waste in health care costs more easily than others. For example, waste occurring within your organization is remediable by your organization. But waste generated by interactions between and among health care organizations requires cooperation, and sometimes government action, to remediate. A recent Health Affairs article co-authored by MGMA reports that practices spend $68,274 per year per physician on health plan interactions alone.
That's why MGMA has urged Congress and the Obama administration to focus on three long-overdue steps toward administrative simplification that could save medical group practices $40 billion over 10 years:
Propose and finalize the National Plan Identifier regulation Finalize the National Electronic Claim Attachment regulation Require public and private payers to issue machine-readable health ID cards1. Propose and finalize the National Plan Identifier regulation
Congress enacted the National Plan Identifier regulation in 1996 as a requirement of the Health Insurance Portability and Accountability Act (HIPAA). However, the Department of Health and Human Services (HHS) has failed to release even a proposed rule for a national health plan identifier, which could save physician practices $8.8 billion over a decade.
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