Although the healthcare industry has made some progress in automating claims-related business processes, new findings in the 5th Annual CAQH Index show that widespread adoption of automation processes can result in huge cost savings.
The index suggests that full adoption of electronic transactions in the healthcare industry will result in potential savings of over $11 billion – with an estimated $2 billion going to dental practices and $9.5 billion for providers.
Projected Savings
When compared with electronic (automated) transactions, the index estimates that each manual transaction requires an additional five minutes of provider time and costs them an additional $4.40. A single medical claim that requires all the transactions benchmarked by the index would take 40 more minutes to execute and cost an additional $15. For dental claims, automated transactions could save 30 minutes of provider time and $11.75.
As you can see in the table below, the 2017 CAQH Index report found that providers and payers stand to save a significant amount of money by automating the processing of claims, including claim submission, eligibility and benefit verification, prior authorizations, claim status inquiries, claim payment, remittance advice, and claim attachments:
In addition to the time and savings resulting from claims automation, there’s also an increase in accuracy and claim quality, given the rules-driven nature of processing electronic records.
Slow Adoption
Although 75% of hospital and health system CEOs state that efficiency and cost reduction top their list of financial priorities, the slow progress in the adoption of electronic administrative transactions to facilitate automation belies this fact.
Despite its widespread use in retail, banking and other industries, automation has seen relatively slow adoption in the healthcare sector. However, stiff competition and current healthcare reform are driving increased interest in eliminating waste, improving efficiency and throughput, and reducing costs. The best way for payers and providers to do this is through automation.
Population Health
With the healthcare industry transitioning to population health, automation will become a “must have,” since there aren’t enough care providers to check in and monitor large patient populations under the new model of care. An Institute for Health Technology Transformation report states that, “Automation is the only strategy that makes population health management sustainable, feasible, and scalable.”
Automation facilitates collaboration among different providers by making medical records accessible through the cloud and increases patient engagement levels through the use of chatbots. Automation will also enable real time access to health information such as social determinants of health. This allows payers to have valuable insight into their populations and evaluate important risk factors and quality of care management.
Advantages of Automation for Providers
As healthcare institutions embrace and implement automation into their practices, they can expect these benefits:
- Labor savings. By leveraging automation, healthcare providers can save time by relegating manually intensive tasks to machines. This leaves clinical teams and administrative staff free to focus on higher-functioning roles that require their expertise.
- Improved quality. Automation helps to reduce human error, thus ensuring consistency and a higher quality of work. When applied to areas such as decision support, order entry and medical records, automation helps to reduce costs, complications and deaths.
- Higher throughput. When administrative staff and clinical teams leverage automation tools, they can effortlessly handle a larger number of patients. Automation can rapidly scale to address the workload of an increasing or decreasing patient population.
- Performance optimization. In addition to reducing costs and improving the quality of care, most automation tools deliver insightful data that can be used for performance optimization and improvement. With each workload, automation systems collect data on the efficiency levels of the processes and use the information to improve workflows.
Performance Improvement
Although automation often comes with a negative connotation, especially with regards to job loss, it can never replace the core functions of nurses, doctors, and payer operations staff. However, it can improve productivity and increase the efficiency of care delivery and operational processes when integrated into workflows. With the healthcare industry striving to reduce costs, eliminate waste and improve throughput, healthcare organizations must look to automation as a core strategy for performance improvement initiatives.