Improved Health Care Efficiency And Price Transparency Are Priorities For Consumers
Health care providers and consumers of medical services agree that greater transparency and improvements in IT systems are needed to make health care delivery more efficient, according to a survey of 1,000 patients and 200 hospital and insurance executives commissioned by the PNC Financial Services Group.
Nearly one-third of every dollar patients spend on health care goes to pay for administration associated with health care claims and billing accounts, the responses of hospital and insurance executives revealed. At the same time, however, 76% of the consumers surveyed said they believe health care administration should account for 10% or less of total health care costs. Moreover, a large majority of consumer respondents told researchers they would be “highly upset” if administrative costs were as high as 30%.
The responses of the hospital administrators surveyed showed that, on average, for every five claims submitted, one is delayed or denied; 96% of claims must be submitted more than once. Executives at hospitals that do not use electronic billing or claims submission processes reported resubmitting claims an average of 11 times or more, or nearly four times as often as administrators at hospitals that use electronic processes. Meanwhile, the insurance executives surveyed said they go back to hospitals an average of two times to get all the information they need to pay a claim.
Of the consumers surveyed, nearly one-quarter reported having a legitimate claim denied by their own health insurer, and one in five of this group said they ultimately paid the denied claim themselves.
Nearly three-quarters of hospital administrators, two-thirds of insurance company executives, and three-quarters of the consumers surveyed agreed that making the claims, billing, and payment processes more efficient throughout the health care system would help to slow the rapid growth in health care costs.
Paula Fryland, executive vice president and manager of PNC's national health care group, said, “While it is possible that consumers do not fully appreciate the cost and complexity of health care administration, hospital and health plan executives identified significant inefficiencies in the business office, describing a medical claims, billing, and payment process that is error prone, redundant, and costly.”
When asked to estimate what level of savings could be achieved through improved processes, around one-third of hospital and insurance executives said their organizations would likely save at least $1 million a year. Much of this savings, hospital executives said, could be reinvested in patient care.
In addition, the insurance executives surveyed pointed to several benefits associated with automated processes, including improved customer satisfaction and a significant reduction in claims processing time.
Survey respondents were also asked whether they believe wider use of consumer-directed high deductible health plans could make the health care system more efficient. Nearly three-quarters (72%) of hospital executives said they expect high deductible plans to add another layer of complexity to administrative processes. However, 58% of consumers said that knowing what hospitals or doctors charge for treatment and what insurers are paying for services would influence where they seek care. When asked if they think insurance companies should make public their reimbursement rates for medical services, 83% of consumers, 77% of hospital executives, and 60% of insurance executives agreed that they should.
“Health care consumerism is an emerging trend that transfers more decisions regarding health care choices, as well as responsibility for payments, back to the patient,” said Fryland. Both the hospital and insurance executives surveyed agree, Fryland noted, that the demand for transparency will lead to a new focus on administrative overhead costs that could help root out inefficiencies.
