This story is not unusual. The experience most doctors have every day is not primarily about medicine. It is about paperwork.<\/p>\n
America spends up to $1 trillion a year<\/a> on health care administration \u2014 billing, coding, prior authorizations, insurance negotiations, quality reporting, credentialing, and so forth. The instinctive defense of this reality is that a complex, multi-payer system requires complex administration. But is that true? Germany, the Netherlands, Switzerland, and Australia all have dozens of private insurers operating within their systems. These are not single-payer systems \u2014 patients have real choice, and insurers compete. But in these countries administrative costs are roughly half of those in the United States<\/a>. In Germany, they constitute 4.3 percent of total health expenditures. In the Netherlands, it is 3.1 percent, and in Australia, 3 percent. In the United States, it is 7.8 percent. <\/p>\n And those figures count only insurer overhead. When adding the burden that fragmented insurance imposes on hospitals and practices, the total administrative spending approaches one dollar in four of health care spending in the United States.<\/a> That is more than the United States spends on all of primary care.<\/a> More than the United States spends on heart disease.<\/p>\n What separates other countries with multiple insurance models from the United States is how their insurers operate. In Germany, all insurers use the same billing system and coding rules, and a physician submits one type of claim regardless of which insurer the patient has. In the Netherlands, benefit designs are standardized nationally. <\/p>\n In the United States, every insurer does things differently \u2014 different forms, different billing codes, different prior authorization rules, different credentialing requirements. Physicians are often directly involved in this paperwork, and even when tasks are delegated, they must review, document, and justify care decisions. Every hospital and physician\u2019s office has to hire staff to navigate all of them simultaneously. The result is a shadow workforce that exists purely to manage the paperwork, which increases the cost to the taxpayer and patients needing care. In Massachusetts, there are nearly as many health care administrative managers<\/a> as there are physicians.<\/a><\/p>\n There are three key ways to reduce the administrative burden in the US health care system. <\/p>\n Fix prior authorization<\/p>\n Prior authorization exists, in theory, to prevent unnecessary care. In practice it has become one of the most despised features of American health care for patients and physicians alike. The delays are real and sometimes dangerous. But the deeper problem is the variation. A doctor prescribing a common medication fills out one form for one insurer, a different form for another, waits three days here and two weeks there. The American Medical Association found that the average physician practice completes 39 prior authorization requests per physician every week and spends 13 hours doing it<\/a>. That is 13 hours of physician and staff time spent seeking permission to practice medicine rather than practicing it.<\/p>\n Instead, federal and state regulators should standardize the forms, mandate common timelines, and require automatic approval for routine, evidence-based treatments where clinical guidelines are clear. Then they should require that insurers operate under common rules about what requires authorization in the first place. Congress has been inching toward this for years<\/a> but has not finished the job.<\/p>\n Build the health care equivalent of the banking clearinghouse<\/p>\n When you swipe a credit card, the transaction clears in seconds because the industry agreed on common standards decades ago. Health care claims work nothing like this. More than 9 billion insurance claims are filed every year<\/a>; each costs between $12 and $19 to process and takes four to six weeks to pay, because every insurer runs a different system with different forms, rules, and workflows \u2014 adding both cost and delay. The solution is straightforward: a universal clearinghouse for submitting, processing, and paying claims. Providers submit once. Payment moves in days. David Cutler, a Harvard economist and an architect of this idea, estimates the savings at tens of billions of dollars annually<\/a> \u2014 not by cutting care but by cutting the friction of paying for it, with benefits shared across providers, insurers, and ultimately patients and taxpayers.<\/p>\n Standardize the rules<\/p>\n The deepest fix would be to require all insurers to operate under a common set of rules. This includes standardized billing codes, a common credentialing system so physicians don\u2019t re-credential separately with every insurer, and a single set of quality measures so providers aren\u2019t reporting different measures to each payer. Physician practices currently spend more than $15 billion a year on measuring and reporting<\/a> data on quality \u2014 roughly $40,000 per physician \u2014 for measures that fewer than a third of physicians believe actually reflect the quality of their care.<\/p>\n Administrative roles are deeply embedded across the health system, and reducing them is not costless. But we have built an enormous workforce devoted to managing complexity rather than delivering care. Reducing that complexity would free up both human and financial resources. <\/p>\n The bottom line<\/p>\n Reforms like these could save $200 billion or more<\/a> annually. These savings would not require cutting benefits, rationing care, or reducing what doctors get paid but would rather be achieved by reducing what everyone pays for the paperwork. Physicians in Germany, the Netherlands, and Switzerland face far less administrative burden<\/a>, with administrative costs that are half of ours, and report fewer demands that take them away from patient care. Their patients spend less time fighting with insurers<\/a>. It\u2019s time the United States requires private insurers to operate more rationally as well.<\/p>\n What happened to the person who paid for his medication out of pocket is what the system produces when every insurer makes its own rules. He got his medication because he could afford to pay out of pocket. Millions of Americans can\u2019t \u2014 and for them, missing doses of blood thinners could lead to life-altering strokes or worse. The United States built this current system. It can build a better one.<\/p>\n","protected":false},"excerpt":{"rendered":"This story is not unusual. The experience most doctors have every day is not primarily about medicine. 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