08 Oct Reducing Administrative Complexity Biggest Opportunity to Reduce Health Care Waste
MedicalResearch.com Interview with:
Dr. Shrank
William Shrank, MD, MSHS
Chief Medical Officer
Humana
MedicalResearch.com: What is the background for this study?
Response: Health care waste is a serious problem in the system and the rising and uncontrolled costs of healthcare remain one of the top political and social issues in the U.S. We thought that sufficient time had passed since the 2012 groundbreaking analysis that was developed by Donald M. Berwick, MD, MPP and Andrew D. Hackbarth, MPhil, that first characterized waste in the US health system.
MedicalResearch.com: What are the main findings? How much of this waste is realistically preventable?
Response: We found that between $760 billion to $935 billion, or 25 percent, of our annual health care spending can be characterized as waste. This waste is found across six domains. Administrative complexity represents the greatest source of waste, with pricing failures being a close second. Payer-provider collaboration through data interoperability, value-based care models and other strategies may offer opportunities for eliminating administrative processes, improving health outcomes and reducing waste. We found that proven successful interventions could help us reduce this waste by $191 billion to $282 billion a year, if scaled nationally.
MedicalResearch.com: What should readers take away from your report?
Response: Reducing administrative complexity is our biggest opportunity. We waste approximately a quarter of a trillion dollars every year on administrative complexity, and the key to reducing this waste is to foster deeper collaboration between health plans and clinicians; harnessing data sharing through interoperability; and empowering providers to move from fee-for-serve payment models to value-based models. Health plans need to embrace the call from CMS when it comes to interoperability.
MedicalResearch.com: What recommendations do you have for future research as a result of this work?
Response: Future research must focus on examining the best practices from health care programs that have been proven to not only reduce waste, but also improve health outcomes and increase quality. The Medicare Advantage program has been a rich laboratory for such improvement because it offers a platform to personalize care and takes a holistic approach to address physical, behavioral, and non-clinical issues, such as the social determinants of health.
MedicalResearch.com: Is there anything else you would like to add?
Response: Pricing failures represent the second greatest source of waste. Prices for health services and products tend to be much higher in the U.S., particularly for medications. Efforts to advocate for policies that promote greater competition in the marketplace and price transparency for patients should drive considerable savings.
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Last Updated on October 8, 2019 by Marie Benz MD FAAD