How the USA Could Slash at Least $75-Billion Off Healthcare Costs - and Keep Saving

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Administrative costs can cripple healthcare with high cost. A decade ago in South Africa it took 69 days for a doctor to be paid because payments relied on medical staff to record accounts by hand or computer, then mail them and wait. Now, technological innovation sees doctors get paid within 11 days of seeing a patient. In 2001, the cost of administration was 17% of the total cost of private healthcare in South Africa and claims were 35% electronic with none in real time. Today, South Africa processes more than 90% of private claims electronically with half in real time. In the USA, close to 90% of claims sent to insurers are still by on paper - ensuring higher costs than necessary .

For US healthcare legislation to be effective it will require a mini-revolution in relatively old-fashioned administrative techniques

“Yes, we can” has become “How do we do it?” for health care administrators across the United States. Surprisingly, some of the answers to ‘how’ can be found in developing nations like South Africa where technological advances in private health care administration remove to five percent off costs every year.

These savings can as easily be achieved in the public sector, according to Gerrie van Zyl, CEO of major technology group Tradebridge.

He says, "The US has lagged with the conveyance of electronic medical payments and information. It is self-evident that the more that is done by hand the slower the task and the higher the risk of error." The New England Journal of Medicine has observed: “Greater efforts at the evaluation of technology in managing practices can improve the quality of patient care, avoid waste and promote the more rational use of health resources.”

Van Zyl, whose associate company Healthbridge is the largest medical payment and information distribution agency in South Africa with new business interests in the USA says: "A decade ago in South Africa it took 69 days for a doctor to be paid because payments relied on medical staff to record accounts by hand or computer, then mail them and wait. Now, because of technological innovation from our company and others, doctors get paid within 11 days of seeing a patient."

In 2001, the cost of administration was 17% of the total cost of private healthcare in South Africa and claims were 35% electronic with none in real time. Today, South Africa processes more than 90% of private claims electronically with half in real time. In the USA, close to 90% of claims sent to insurers are still on paper which raises administrative costs and the possibility of error.

Van Zyl observes: "The advantages of electronic administration move beyond claims submission. We send a daily sms to medical practices telling them how much their practice earned that day and alerting them to potential bad debt. Patients can pay insurance shortfalls by cash, electronic banking or sms. Pathology results are conveyed electronically to doctors and by sms to patients, as well as reminders about upcoming visits needed, especially for patients needing chronic care.

"In 2009, electronic settlements and movement of information meant R1bn (ZAR7 = US$1) in savings to the private healthcare sector in South Africa from our company alone (we represent 60% of doctors, all hospitals, most pathologists and radiologists). Savings from additional electronic services and other companies meant savings were close to five percent of an annual R66bn private healthcare bill.

"We believe that if the US implemented the same techniques, the savings would be greater, around 10% of healthcare costs a year or a staggering US$75bn." This view has been supported by others with no link to Healthbridge or Tradebirdge: MD On-Line CEO Bill Bartzak, who spoke at November's World Health Care Innovation and Technology Congress in Alexandria, Virginia, estimated savings of $86bn.

"For the new US healthcare legislation to be effective it will require a mini-revolution to remove relatively old-fashioned administrative techniques in US healthcare. Few countries are as well-equipped to quickly harness the technology that can effect radical change.

"The other aspects of ther new US health laws are easier to manage than some critics would have you believe. As an example, in South Africa, for many years, medical insurers have not been allowed to refuse cover to those who are ill or who have pre-existing conditions.

And medical insurers in South Africa have long encouraged preventative measures by members whether subsidising gym membership, the purchase of healthy foods or awarding cost-saving points to those who go for disease prevention check-ups like regular pap smears or podiatry for diabetics. "To not subsidise prevention in health care is a little like expecting a baseball team to win the World Series without ever practising," Van Zyl quips."The challenge is to provide good care cost-effectively."

FOR MORE INFORMATION CONTACT:
*Gerrit van Zyl (gerrie(at)tradebridge(dot)co(dot)za) is CEO of Tradebridge, which owns Healthbridge http://www.healthbridge.co.za

Or

Public relations assistant: Leila Beltramo 857 312 4836 (Boston, MA)

Issued by Charlene Smith Communications http://www.charlenesmith.net

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