Article by WashingtonStateWire. Published on Tuesday, October 21, 2009 EST.
It Ain’t Sexy, but a Little-Noticed Washington Efficiency Effort Promises Big Savings
State Insurance Commissioner Mike Kreidler
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, Oct. 21.—Making the health care system more efficient is one of those things that reminds you of the weather – everybody complains, but nobody ever does anything about it.
But in Washington state, an effort that got under way long before health care reform occurred to Congress is starting to get somewhere. Over the last two years, a collaborative effort by government and industry players has identified the shape of the table – a snarled administrative process that swallows 30 cents of every dollar that is spent on medical care. And within a year they hope to start rolling out new approaches that streamline the back-office operations of private and state-managed medical programs.
It’s not the sexy kind of policy work that is generating headlines right now in Washington, D.C. – it’s not about universal medical coverage, benefit taxes or mandatory health insurance. What state and industry officials in this state are talking about are modest reforms in the way health plans operate – standardizing the way they manage information and run their programs. But in some areas Washington is really going where no state has gone before, said state Insurance Commissioner Mike Kreidler, and the state may wind up developing a few ideas that could be adopted nationwide – for instance, in medical-credential record-keeping.
“One or two other states have tried this without much success,” he said. “We will be at the cutting edge if we pull this off.”
If it all seems a bit obscure, consider: When you present your insurance card at your doctor’s office, the staff might spend half an hour confirming your coverage and determining how much you have to pay. Why couldn’t it have been done with a few strokes of the keyboard when you set the appointment? And why does everyone’s insurance card look different, anyway?
And if it seems odd that these questions haven’t come up before – well, actually, they have. The health care industry in Washington state has been discussing standards for the last 10 years. It’s just that it didn’t get very far until the state got involved.
Private Company Plays Major Role
Making the system more efficient is a big task. In Washington state, the bulk of the private health insurance business is carried on by eight companies, but there are 100 players in the business, and some companies manage health programs of their own. The state of Washington is a major insurer as well, through Medicaid and other programs. Each of these payers has different eligibility rules, different copayments, different records requirements, different verification procedures. And each of them communicate differently with the providers – the state’s 100 hospitals, its 300 surgery centers, its 23,000 doctors, its 100,000 health care providers. Managing that information is a big business all by itself – of the $36 billion spent on health care in Washington in 2007, about $6 billion went toward administrative functions.
An industry-sponsored effort to develop standards got under way in 1999 with the backing of the Washington Healthcare Forum, an association of the state’s largest insurers, provider groups and business interests. It adopted policies and guidelines, but because its standards were voluntary, it didn’t make much headway. Then the state started taking an interest. In 2007 lawmakers began contemplating a state-level health reform program as sweeping as the one now being debated in Washington, D.C.
While enthusiasm for a major new state program was dampened by recession and the Obama Administration’s decision to make the issue its own, the state’s smaller-scale efforts continue to plug along. Bills passed by the Legislature this year direct the state Health Care Authority to develop new standards for electronic medical records, while the insurance commissioner’s office has been charged with identifying other opportunities for administrative simplification.
In both efforts, nuts-and-bolts design work has been left to a private company, OneHealthPort, a firm sponsored by Forum members that aims to set standards for records and administrative procedures. OneHealthPort is not operating under a formal contract with the insurance commissioner’s office, but it has the support of the industry groups whose cooperation will be necessary. Meanwhile, it hopes to capture some of the federal money available for electronic-records development through a more formal arrangement with the Health Care Authority. “We have cornered the market on doing free and complicated work for the state,” joked CEO Rick Rubin at a meeting of Kreidler’s task force Tuesday.
Like Herding Cats
It’s not easy getting everyone together, Rubin said, much less getting everyone to agree. Kreidler’s task force has convened some of the biggest players in the business – insurance companies, large providers, hospitals, and the Washington State Medical Association, which represents doctors. The only major interest not at the table is the federal government, which is a major purchaser of medical services through its Medicare program.
“I can tell you I think this absolutely represents a critical mass,” Rubin said. “With the exception of Medicare, this represents a pretty good book of everybody’s business.”
The trouble is that it’s hard to involve the thousands of providers who also will play a vital role. Most are small, and don’t have the time to get involved. “They’re harder to reach, and it’s harder to get their attention,” Rubin said.
It’s one of the reasons the task force hasn’t begun one of the biggest parts of its job – deciding whether there should be an effort to adopt standards for medical management practices.
For now, the efficiency drive is focusing on the easier tasks – and it appears that one effort is about to pay off.
A First Fruit
Within the next year, OneHealthPort hopes to launch a credential-information program that will standardize the way doctors and other providers furnish information about their operations to the state and to insurance companies. OneHealthPort designed the parameters of the program, and found a private company, Medversant, that promised lower costs and better service than its competitors. Medversant’s webcrawler technology will fill out the vast majority of blanks on record forms, leaving providers to fill out only a few.
Under the program, health care plans would pay a flat rate to access records provided by Medversant; providers would not be charged. The way the program works is of vital interest to insurers and the state, Rubin said, because Medversant would essentially be handed a state franchise for the work. Payers want to be sure they aren’t gouged.
Rubin noted that the payers are on his board of directors. “The OneHealthPort board has been very clear – this is not a place for us to make a lot of money.”
A progress report is due to the Legislature by the end of next year, but Rubin said his firm hopes to have the credentialing program in place well before then.
Other Challenges
The credentialing program is one of several areas that the efficiency drive will tackle. Others include:
n New state regulations regarding coordination of benefits claims processing.
n Standardized processes for “preauthorizations,” over the Internet, through which providers can obtain prior approval from payers for medical procedures. Many providers right now rely on the phone or the fax.
n Streamlined ways to provide information about patient benefits, eligibility and cost-sharing requirements.
n Standardized payment policies and “code edits” – the billing line-items used by providers and payers.
Kreidler said the efficiency effort is an essential part of health reform, even if it isn’t the kind of thing that makes the front pages. “Administrative costs will never go to zero, but we have a substantial opportunity to get a substantial part of that 30 cents, and deliver it back to health care.”
The state has to be careful to ensure that nothing it does conflicts with the health reform legislation now being considered in Washington, D.C. But Kreidler said he thinks the reforms contemplated in this Washington can coexist. “A great deal of focus right now is on the states,” he said. “This is an opportunity for the state [of Washington] to provide some real leadership.”
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