Administrative costs are a growing goliath in the American healthcare industry. This year, 30 percent of all healthcare costs will be administrative in nature, from billing to coding, schedule keeping, wrangling with insurance providers, maintaining patient relations, and all the rest of your medical practice’s day-to-day operations.
Unsurprisingly, at a cumulative cost of $320 billion dollars per year, America leads all nations in overall admin expenses.
What’s worse is that administrative costs have shown little positive effect on the quality of medical care offered. In fact, according to a recent study, there may actually be an inverse relationship between the quality of care a patient receives and high admin expenses.
Without question, many administrative costs are simply unavoidable for practices. The insurance and billing landscape in America remains incredibly complex. And while lights must remain on, patient files must be maintained, and talented staff should be supported, understanding how to lower operational costs with efficiency should be a main priority for any clinic.
The New Tech-Savvy Patient
For an industry still dominated by paperwork and fax machines, streamlining many processes and adopting technology is a no-brainer. Even today, only three-fourths of all medical providers verify insurance coverage and benefits electronically. Most referrals are still conducted via fax. Arranging and confirming appointments are usually a time-intensive daily task for staff, making repeated calls, leaving phone messages and recording any scheduling manually.
However, times are undoubtedly changing. Medical technology is being embraced by not only doctors, surgeons and insurance companies, but patients. In the last three years, the number of Americans who had at least one health app on their phone doubled. A degree of self-service is now expected by the American public concerning their healthcare. The Health Research Institute found that more patients than ever prefer virtual communication for their health interaction. As a sign of these changing times, many insurance companies have built their own mobile tools, where patients are now able to search for in-network professionals and access their ID cards from their phones.
With Efficiency, Both Patients and Providers Win
Healthcare experts agree that additional automation and technological sophistication will be needed to cut down on rising administrative costs. According to the Modern Medicine Network, “the quest to reduce administration costs has many health plans moving to more online platforms, and healthcare experts agree that automating functions can minimize traditionally labor-driven expenses.”
One recent success has been the adoption of electronic medical records (EMR). In the last five years, studies have shown that the accuracy of recordkeeping has not only gone up, but that the price of an EMR system is easily offset by the cost-saving efficiency it provides.
For medical practices, focusing on electronic communications is a great first step. Offering patients online explanation of benefits (EOB) information and document access reduces cost. Adopting systems and services that will help your clinic transition from phone contact to text messaging and email will save precious time and money almost immediately. Online portals or patient-controlled options to schedule appointments have already been wildly successful, while minimizing administrative resources. Further, segueing from a fax-dominated referral process to an automated platform like Luma, will raise efficiency, maximize patient care and drastically reduce the manual labor required to keep track of every scheduling, re-scheduling and cancellation.
Remember, administrative costs don’t just decrease your bottom-line; those savings get passed down to your patients.
Ask yourself, how can your medical practice embrace new technologies today?