Report: Payor says IT could save U.S. healthcare $322B

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Savings of $332 billion in U.S. healthcare expenditures could be achieved over the next decade by making better use of technology and streamlining administrative processes, according to a report by UnitedHealth Group's Center for Health Reform and Modernization.

The report estimated that perhaps half of the $332 billion savings would accrue to physicians and hospitals, 20 percent directly to the government in its role as a healthcare payor through Medicare and Medicaid and 30 percent to health plans. However, there are various ways in which a higher share of the savings could become available to the federal government.

The paper detailed how these reforms could be designed and implemented through:

  • Tighter mandatory data and transaction standards;
  • Elimination of antiquated manual processes, unnecessary paperwork and redundant intermediaries;
  • Automated payment accuracy processes across the healthcare system;
  • A single credentialing and quality measurement process; and
  • A sophisticated and consistent regulatory regime.

"Shared action is now needed across all payors--commercial and governmental--in partnership with physicians and hospitals," said report co-author David Wichmann, president of UnitedHealth Group Operations. "UnitedHealth Group, for example, now has 30 million magnetic swipe cards in circulation that would eliminate much red tape for patients, but the full potential of these cards will not be realized without agreed upon universal standards adopted across the healthcare system."

The payor said that examples of approaches that could achieve administrative simplification and significant administrative cost savings over the next 10 years include:

  • Broader use of automated swipe cards ($18 billion);
  • Creation of a national payment accuracy clearinghouse ($41 billion); and
  • Elimination of paper checks and paper remittance advice ($109 billion).

This report is a companion to the Center's paper released in May that identified $540 billion in potential federal medical cost savings.