Linda L. Kloss of the American Health Informatics Management Association states that past efforts at healthcare administrative simplification have often not only failed to reduce costs, but actually increased complexity and cost. Real improvements and cost reductions require an end-to-end view of the business processes, not only within but across sectors and entities, and a commitment to uniform and standard processes and continuous improvement. Drawing on the work of the Healthcare Administrative Simplification Coalition, she focuses on four processes with the potential to reduce costs for providers and payers and improve service to purchasers and consumers: practitioner credentialing, insurance eligibility, standard insurance identification (ID) cards, and prior authorization. She also identifies governance of policy, uniform standards, process and conformance education, and continuous improvement as four common elements among recommendations relating to claims and payment, quality reporting, terminologies and classifications, and other critical healthcare business processes.

Harry Reynolds of Blue Cross and Blue Shield of North Carolina builds on these suggestions, stating that through the tracking and reporting of actual operational changes, industry-driven efforts to bring lasting change to the administrative aspects of health care are currently demonstrating their ability to reduce costs and increase efficiencies. However, he posits that although many in the industry are working to gain greater industry adoption of these efforts, significant challenges exist with regard to integrating these efforts across the healthcare system so that all-payer administrative simplification, public and private alike, could be achieved. Discussing the specific challenges and potential opportunities demonstrated through two initiatives—the Universal Provider Datasource and the Committee on Operating Rules for Information Exchange—he emphasizes the critical need to ensure that these efforts continue to be aligned with federal health information technology policies, the necessity of multistakeholder support, and the barriers posed by the inevitable changes to current business practices.

ADMINISTRATIVE SIMPLIFICATION AND PAYER HARMONIZATION

Lewis G. Sandy, M.D.

UnitedHealth Group


As policy makers grapple with how to reform the U.S. healthcare system, one area of considerable agreement is the opportunity to streamline and simplify administrative processes. Significant differences exist regarding the overall magnitude of the costs of administration in the U.S. healthcare system. Some of these differences relate to varying definitions of “adminis-



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