Plan to cut health care waste moves ahead in Oregon

By Laura Etherton, OSPIRG Health Care Advocate

Health care consumers: 1
Administrative waste: 0

This week, Oregon struck a blow against the TPS report cover sheets of the health care world.

Members of the Oregon Health Policy Board approved a plan to cut health care administrative waste and save Oregonians $100 million per year in the process.

The administrative simplification plan (pdf) targets needless paperwork that wastes doctors’ time and adds to already unaffordable health care costs.

This is good progress.  Health care costs more than it should. We can’t afford waste, especially if it ties up doctors’ time that could be spent with patients. These are exactly the costs we love to see cut.

Administrative simplification, as it’s called, is one of many pieces moving forward through as a result of the Oregon health reform law passed by the 2009 Legislature. Other pieces are tackling different sources of high costs in the system – from avoidable hospital readmissions, to the lack of timely preventative care, to perverse incentives in the insurance market.

I  co-chaired the public-private workgroup that developed the administrative simplification plan, together with Dale Johnson, head of Human Resources for Blount and chair of the Oregon Coalition of Health Care Purchasers. The group was convened by the Oregon Health Authority’s Office of Health Policy and Research, which brought together health providers, insurance company representatives and others to develop the recommendations.

Based on a successful approach already in place in Minnesota, and building on work already happening in Oregon, the plan requires insurance companies to move away from each using different paper administrative forms, and instead move to one standard electronic form. Physicians’ offices will then only have to use one system  to check a patient’s eligibility for benefits, submit claims, and receive payments.

The Oregon plan will go into place in phases, with the first changes – standard electronic forms for eligibility verification – scheduled to be in place starting in January 2012. The plan dovetails with health information technology improvements coming online at the same time, aimed at reducing errors and improving quality of care for patients.

Between now and then, there’s work to do to put the plan in place. Starting this fall, the Health Leadership Task Force will convene a broad-based technical group to adjust Minnesota’s specifics to fit Oregon, and the Oregon Department of Consumer and Business Services’ Insurance Division will issue rules requiring all insurance companies to use the standard forms. In addition, the 2011 Legislature will need to pass legislation to apply the standard forms to all segments of the market, including third-party administrators which administer the self-insured plans of very large employers, and the clearinghouses that work with providers to submit administrative forms to insurers.

At OSPIRG, we’ll monitor progress of this plan as it gets implemented.  And we’re also looking at ways to make sure the savings we see from cutting all this waste ends up in the right place:  Serving consumers by reducing health care costs and freeing up physicians to focus on high-quality care.

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