Howard County Maryland Blog

Local Politics and Current Events

Heath Care Cost Savings by Reducing Paperwork?

Posted by Ed C on Monday, August 17, 2009

There have been may claims and counter claims in the health care debate.   You may find it comforting that when pressed to come up with a model of efficiency in a government run program, President Obama picked the post office.

And then Sunday, Aug 17th on Meet the Press, Rachael Maddow made this statement:

I, I think the policy about what we actually do makes a big difference in terms of how much we have to spend and how much savings we get. One of the reasons that I think a lot of liberals and Democrats are in favor of a strong public option is because the administrative costs are so much lower in a government program, frankly, like Medicare, than they are in private insurance.  We waste so many billions of dollars on the administrative costs of having the private insurance-based system that we have now.  When you compare us to other industrialized country that don’t have that much of a reliance on all these different thousands of insurance companies, we’re wasting a lot of money just moving paper around.  Ask healthcare professionals how frustrated they are with how much paperwork they have to…(unintelligible)…

Increased government involvement in heath care is going to reduce paperwork?  Congress has passed the Paperwork Reduction Act of 1980, its successor, the Paperwork Reduction Act of 1995.   In 2008, the Office of Management and Budget released the Information Collection Budget in 94 page report without any apparent irony.  Twenty nine years later, how are things working out?

Based on agency estimates of PRA burden, the public in FY 2007 spent approximately 9.64 billion hours responding to or complying with Federal information collections. This represents an 8.1 percent increase over the 8.92 billion hours that were reported for FY 2006.

What about Medicare, a government run heath care program?  In 2002 the Heritage Foundation published Why Doctors Are Abandoning Medicare and What Should Be Done About It.

  • Physicians are drowning in a rapidly growing morass of confusing red tape and bureaucratic paperwork created by Congress. This regulatory morass undermines efficiency and diminishes the quality of patient care. A recent American Medical Association survey of physicians found that more than one-third of responding doctors spend an hour completing Medicare paperwork for every four hours of patient care. Every precious hour and dollar spent complying with Medicare paperwork means less time and money spent on patient care.
  • Physicians get little help from Medicare and its contractors in interpreting the rules, regulations, and guidelines imposed by the Medicare bureaucracy. Medicare’s rules are so complex and confusing that even Medicare personnel and contractors rarely give physicians and other providers correct answers regarding the system’s regulations. According to the U.S. General Accounting Office (GAO), customer service representatives from Medicare contractors answered only 15 percent of GAO test questions “completely and accurately.”

And  according to the NY Times in April of 2009 – Doctors Are Opting Out of Medicare.  The reason, “The doctors’ reasons: reimbursement rates are too low and paperwork too much of a hassle.”  So it does not look like things are getting any better.

Proponents of government run health care like to cite that Medicare spends 3% on overhead while private insurance overhead runs around 12%.  However, depending how you account for things, Medicare overhead estimates run from 3% using percentage of overhead to total money spent, to around 16% if you count overhead per individual instead of total dollars.

However you slice it, I just can’t see a government run program reducing paperwork and providing efficient, consumer oriented service.  Dealing with an insurance company probably does not rank on anyone’s list of fun things to do, but surly dealing with the government, aka the DMV, the IRS or even the post office rank even lower.

Chances are that a 1000+ page bill is not going to provide the efficient, streamlined process that Ms. Maddow envisions.  After all, the Paperwork Reduction Acts of 1980 and 1995 seem to indicate otherwise.

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One Response to “Heath Care Cost Savings by Reducing Paperwork?”

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