Senators hear administrative burdens and potential solutions that could help physicians, patients

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Value-based care, increased competition and a standardized claims process all could help the problems in the U.S. health care system that are piling on to physician burnout, patient outcomes, and growing costs, said three experts who testified in Congress.

On May 8, the House of Representatives and the Senate both had hearings about administrative hang-ups that are costing more and providing less to patients, while consuming time and adding to frustration of physicians.

The Senate Budget Committee hearing was “Reducing Paperwork, Cutting Costs: Alleviating Administrative Burdens in Health Care.” Those burdens are hurting primary care, said Noah Benedict, MHL, president and CEO of the Rhode Island Primary Care Physicians Corp. The company has primary care physicians and providers managing care of more than 200,000 patients.

“The United States health care system spends an estimated $2,500 per person per year on excess administrative costs that do not deliver clinical value, a staggering amount,” Benedict said in written testimony for the Senate Budget Committee hearing,

It’s a burden on physicians, hospitals, other providers and payers, and studies estimate at least half of it is likely ineffective and wasteful, Benedict said. His own practice is spending $12,480 a year per provider, or $2.1 million a year, for support staff managing prior authorizations (PAs), he said.

Possible solutions

Benedict testified along with Anthony M. DiGiorgio, DO, MHA, FAANS, An assistant professor at the University of California San Francisco, and Harvard economist David M. Cutler, PhD. They offered their ideas on the best reforms that would help physicians and patients.

New value-based care payment models would facilitate administrative simplification, Benedict said. He described it succinctly: “Value-based care correlates the amount health care providers earn for their services to the outcomes they deliver for their patients, as compared to fee-for-service which rewards the volume of services provided.”

Value-based care will encourage globally capitated payment models that combine payment for services by different providers or different levels of care, with single prospective payments to care organizations or large physician groups, Benedict said. That becomes a relatively simpler transaction that has less administrative burden for payers and physicians, compared with fee-for-service payment, he said.

Increasing competition will drive improvements in administrative burdens, DiGiorgio said. That involves the U.S. Centers for Medicare & Medicaid Services, its payment regulations, and a “quality diet” with a living system of metrics that retires or modifies metrics if health goals are met or if the metrics are ineffective or harmful. Health care needs a level playing field for new entrants, so lawmakers and regulators must address conditions such as site-neutral payment, the ban on physician-owned hospitals, and the 340B drug pricing program. The U.S. Department of Justice and the Federal Trade Commission must challenge consolidation in the industry, he said.

Prior authorization needs a “spring cleaning,” Cutler said. Typical payers have several thousand PA codes, split between services and pharmaceuticals, and some of those are no longer appropriate. For example, all the leading antihypertensive drugs are generic and overuse is extremely low, so “there is no justifiable reason” for PA for those drugs, Cutler said.

It would be helpful for the federal government to commit to a standardized claims process. That would require an upfront cost when payers update their operations to handle it, “but the ongoing savings would dwarf these costs,” Cutler said.

Testifying about problems

In their testimony, the three experts described circumstances that physicians and patients encounter daily, often with frustration, if not harm to health.

Years ago, “physician recommendations were sacrosanct,” but now prior authorizations for procedures and medicines cost money and delay or interrupt medical services and decisions, Benedict said. In an internal survey, 73% of the practice’s providers said PA wait times were at least two day; among them, 38% said PA wait times were at least three to five days, and overall, 51% said PAs often delay access to necessary care. Meanwhile, primary care physicians spend up to 20 hours a week on administrative paperwork, which directly takes time away from patient care, he said.

DiGiorgio discussed electronic medical records adding to administrative burdens. Collectively, American physicians spend 125 million hours on documentation outside of office hours, much of that for billing, he said. Internal medicine residents spend 40% of their time on computers, and physicians generally spend two hours on the computer for every hour of patient time, he said.

An assistant professor at the University of California San Francisco, where physicians reported EMR systems were so inefficient they needed IT assistance to order life-saving medications, DiGiorgio said. He cited a recent JAMA paper in which the author described more patient-centered care and collaboration when the EMR system went down.

“What does it say about a technology that its failure improves service delivery?” DiGiorgio said.

Cutler estimated the administrative cost of health care is $950 billion a year, or three times what the nation spends on cardiovascular disease and almost four times what the nation spends on cancer care.

That spending is driving up Medicare Advantage premiums and federal spending on Medicaid and the Children’s Health Insurance Program, Cutler said. The nation could cut administrative costs to save money on health insurance provided through the Affordable Care Act exchanges. Cumulatively, reducing administrative burdens could save an estimated $1.4 trillion over the next decade, he said.

There is reason for optimism about administrative reforms, Cutler said. Policy attention is at an all-time high, and dissatisfaction with PAs also is high among physicians, patients and payers. Meanwhile, artificial intelligence could help streamline processes and materially changes the administrative costs of health care, he said.