Administration Significant Part of Healthcare Costs
The PNC Financial Services group commissioned a survey last month which examined administrative burden associated with insurance payment and healthcare transparency issues. According to the survey, administrative costs represent one-third of healthcare consumer spending; particularly costs associated with claims and billing.
Chadwick Martin Bailey, an independent research firm, completed the telephone survey with 150 health system executives and 50 insurance executives. Online surveys were completed by 1,000 consumers. Executives from both sides of the industry agreed that improvements to the efficiency of billing and payment processes would curtail costs; a potential $1 million in savings annually per provider.
The survey posed questions about issues surrounding transparency with payment. Consumers said their choice of hospitals and providers would be influenced by information on billing and reimbursement rates. Over 75 percent of both consumers and hospital executives felt insurance reimbursement rates should be made public; 60 percent of insurance executives concurred.
Other key findings from the survey include:
- 76 percent of consumers felt administrative fees should be ten percent or less of total healthcare costs,
- Almost 80 percent of consumers would like a bill that itemizes costs associated with administration versus clinical care,
- Hospital executives said over 95 percent of claims must be submitted more than once and 20 percent of claims are either delayed or denied,
- Hospitals without electronic billing or claims processing resubmitted claims almost four times more often than those with electronic procedures,
- Insurance executives noted most claims were incomplete, requiring additional contact with hospitals, and
- Almost 25 percent of consumers had a legitimate claim denied by insurers at least once.
Related stories:
- Insurers Question Hospital Pricing
- Healthcare Top Concern in U.S.
- CMS Makes Hospital Payment Information Available
March 24, 2007 Related topics: Finance, Trends, Evaluation & assessment