Steven Goldberg, MD

One example of the administrative redundancy weighing down our system is the annual contracts between providers and insurers. Every year, hospitals, physician groups and health plans sign agreements that determine how the providers will be paid. But each agreement is built (often needlessly) on a different set of contract terms, prices and protocols.

An average physician practice must sign dozens of different contracts each year. The Medical Group Management Assn. estimates that the process of developing these agreements costs a total of more than $2 billion annually. Another study by the Group Practice Research Network estimates that medical practices devote more than five hours negotiating each contract.

Also, to be approved to receive compensation, each year, physicians must submit their professional qualifications to insurers in lengthy and time-consuming applications. Unfortunately, each insurer's credentialing process is slightly different. The Medical Group Management Assn. estimates that an average practice with 10 physicians spends nearly $80,000 per year simply submitting the credentialing applications.

Despite these costs, the healthcare industry has not moved toward a standard method of credentialing. For example, when it comes to evaluating qualifications, why can't we learn from the financial services industry, which uses a standard process and just three vendors to assess the credit history of every borrower in the nation?

These are only a few examples of the needless complexity in our healthcare system. This is a system of both duplication and variation; identical core business processes are performed in countless different ways. The result is mountains of red tape, lost productivity and increased costs that we can ill afford.

EASE STRAIN ON PROVIDERS

For providers and the office staff, such processes represent a very expensive administrative hassle that is straining the physician practices. The administrative complexity benefits no one, entails a significant amount of paperwork, and results in less time to care for patients. Streamlining the processes would be a win-win for providers and for patients because the faster the credentialing and the contracting processes, the sooner the physician can treat health plan enrollees. By minimizing the time spent on administrative processes, physicians and staff could focus more on delivering care and improving outcomes.

Of course, healthcare will never be an industry where one size fits all, but imagine the potential. If we can identify just a few areas where we can apply the lessons of other industries and reduce unnecessary complexity, our resources can be redirected and put to better use. Several initiatives, such as the Healthcare Administrative Simplification Coalition and the ChangeNow4Health campaign, already embrace these goals. Simplify by adopting standard contract terms. Simplify by adopting credentialing standards. Simplify through the power of simple ideas.

Steven Goldberg, MD, is corporate medical director, clinical policy for Humana.