Hospitals want to reduce $6B bill for overhead costs - Portland Business Journal:

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Representatives from hospitals, medical groupx and health insurance plans have convenedf three working groups durinv the past three months to explore ideae and opportunitiesfor savings. Even modest streamlining woul d mean big savings for businessesand consumers. Health care is a $19 billion business in Oregon, meaninh that nearly $6 billion a year goes to overhear costs. Claims processing, provider credentialing and determining insurancr eligibility alone cost Orego n medicalpractices $42 million annually, based on data collected by the . The project is at a however, because it needs funding and long-term volunteer commitmentd from would-be members.
Between 10 and 15 peopl e have participatedso far. Work group participanty Bart McMullan, president of the Portland-baseed insurance company RegenceBlueCross BlueShield, said the companyh is committed to the effort. “Everyg time you have back and forthbetween hospitals, physicians and it chews up money,” McMullan said. “This is a reallyg important issue, because there are hiddem costs everywhere.” Savings will take time to McMullan added. The effort will cost roughly $100,00 a year and may go on for several said spokesmanAndrew Davidson, CEO of the Lake Oswego-based Health Systems.
It’s modeled on a project Davidson worked on in Washingtonh when he was with the hospitalassociation there. The program’z price tag would be covered bymember commitments. The tab couldx come at an unwelcome time, because many health care companies are struggliny withlower profits. On the other hand, players may be eagert to show regulators andconsumers they’re working to shrinmk administrative costs. If health care companiex don’t act, they could have their hand forced bythe .
The group’s homegrown healthb reform initiative, released this month, proposes several options for curbint Oregon’s skyrocketing health costs, including regulating the purchase of individual insurance and capping overhead for healthinsurances plans. “Hospitals, health plans and physicians are all experiencing marked declinesd in netoperating revenue, and as a result it’s ever more importanr to look for ways to drivd unnecessary cost out of the Davidson said. “The state of the economy today only adds Phone calls, claims resubmissionsd and haggling about treatment coverage are among the meniakl tasks that add up to high overhead in medicakl billing.
Administrative costs accountefd for 31 percentof U.S. healt expenditures overall in 1999, according to an articlse published in the in 2003by Dr. Steffie compared with 16.7 percent in Canada. Employee benefits brokeer Arnie Poutala said medical group s may have the mostto gain. “Providers have so many insurers to deal with and it drivezs uptheir costs,” said Poutala, employees benefits consultant at the Portland brokeragw firm USI Northwest.
“There’s huge potentialo for improvement in a step like standardizingclaims