Electronic claims could save healthcare system billions, report says

July 30, 2009

A new report from UnitedHealth Group says the U.S. healthcare system could reduce costs by $332 billion over the next 10 years if healthcare providers update their technology.

A new report from UnitedHealth Group says the U.S. healthcare system could reduce costs by $332 billion over the next 10 years if healthcare providers update their technology.

The report outlined estimated administrative savings from three general actions, with multiple options under each. The three general actions are: required use of common technology and information standards, with enhanced interoperability and connectivity; use of advanced system-wide techniques to improve payment speed and accuracy; and streamlined provider credentialing, privileging and quality-designation processes.

The option detailing the elimination of paper checks and paper remittances in favor of electronic funds transfer and electronic remittances was estimated to save $109 billion, by far the biggest savings. The second-largest savings would come from implementing a national system to monitor and flag questionable health claims, and would save an estimated $47 billion, the report says.

UnitedHealth estimated that these actions would generate administrative savings, of which 50 percent would go to hospitals and physicians, 30 percent to commercial payers and 20 percent to Medicare and Medicaid. However, UnitedHealth says the government could institute policies to take a larger share to help pay for reform programs.

The $332 billion is only accounting for administrative savings, and does not account for any money saved by electronic systems reducing wasteful medical practices.