Emdeon, which develops and markets revenue and payment cycle management technology for the healthcare industry, has unveiled the U.S. Healthcare Efficiency Index to monitor business efficiency in healthcare as the industry moves from a paper-based system to an electronic one.
Phase 1 of the index estimates the total annual savings potential to be nearly $30 billion for medical claims-related transactions.
"Through the index, we are bringing together industry leaders from all aspects of healthcare to raise awareness of potential savings and create a national measure of business efficiency in the industry," said George Lazenby, Emdeon's CEO.
Among the leaders joining the effort is former House Speaker Newt Gingrich, founder of The Center for Health Transformation.
"Replacing the waste and inefficiency of paper-based administration is critical to transforming health," Gingrich said. "Health information technology can and will fundamentally change the way we deliver and administer care for all Americans."
"Too many healthcare billing-related activities are still conducted on paper or by phone, and too many healthcare payments are still made by paper check and sent by mail," said Lazenby. "Other industries, like banking and travel, have long since addressed this problem. It's time for healthcare to catch up."
Medical payment transactions alone could bring an estimated $11 billion in annual savings through direct deposit, according to the index.
"Healthcare is a human concern that touches all of us," Lazenby said. "Every dollar spent on unnecessary administration is a dollar that cannot be spent on preventive care or covering an uninsured family. Think what we could do with $30 billion every year."
Lazenby said electronic medical records and a promise of clinical savings have dominated the national conversation on the role of information in healthcare reform. The business side of healthcare offers significant potential for savings that is frequently overlooked, he said.
"Too often it is assumed that billing and payment-related transactions have been fixed and are already fully automated, but that is not the case," said Miriam Paramore, senior vice president of corporate strategy for Emdeon. "In fact, there are still billions of dollars in annual savings that could be realized simply by conducting the business of healthcare electronically."
The index is designed to raise awareness of the potential savings and facilitate collaboration and problem solving among the public and private sectors.
Milliman, Inc., an actuarial and consulting firm serving the healthcare industry, will serve as an outside auditor/peer reviewer for the index. The index will also include an independent advisory council.
In Phase 2, a methodology will be established and specific data will be gathered to provide a more in-depth view of the industry's progress, Lazenby said.
Future phases will extend to additional business transaction types, such as pre-authorization, pre-certification and referrals. Ultimately, the index will report on results across multiple dimensions, including payer type, provider type and transaction type.