Alexander: To Reduce Health Care Costs, We Must Reduce Administrative Burden on Doctors, Hospitals

WASHINGTON, D.C., July 31, 2018 – Senate health committee Chairman Lamar Alexander (R-Tenn.) today said the federal government is at fault for some of the administrative burden that the nation’s doctors and hospitals face—which means “more time spent on paperwork, less time actually treating patients, and an increase to the cost of health care.”

“Administrative costs are much higher in the United States than in other countries,” Alexander said. “According to Dr. Ashish Jha, a witness at our first hearing, administrative costs accounted for 8 percent of all health care spending in the U.S., roughly, that is $264 billion compared to only 1 percent to 3 percent for other countries. While many administrative tasks in the health care system come from insurance companies or state requirements, the federal government is clearly at fault for some of this burden.”

“There was a lot of excitement over electronic health records in Washington – many said these records systems would make it easier for doctors and patients to access a patient’s health records and share information with other doctors,” Alexander continued. “Since 2011, the federal government has spent $38 billion requiring doctors and hospitals to install electronic health records systems through the Meaningful Use program in Medicare and Medicaid. Unfortunately, electronic health records systems have ended up being something physicians too often dread, rather than a tool that’s useful.”

Alexander continued, “The Trump Administration has taken a look at what administrative tasks are required by the federal government, and I am glad to see that Seema Verma, administrator of the Centers for Medicare and Medicaid, recently proposed streamlining many of the agency’s burdensome reporting requirements. This is one step, and I look forward to hearing about more the federal government could do to reduce administrative tasks today.”

Alexander made his remarks today at the third hearing in a series on how to reduce health care costs, focused on reducing administrative burden.

During the hearing, Alexander told the story of Dr. Reid Blackwelder, a family physician who chairs a residency program with three clinics in the Tri-Cities area of East Tennessee and is required to have an electronic health records system because he sees Medicare and Medicaid patients. Dr. Blackwelder initially received payments from the federal government to implement the electronic health records system, but he now has to pay a monthly maintenance fee to the electronic health records company as well as paying for periodic upgrades to the system. All of Dr. Blackwelder’s costs add up to being far more expensive than the paper records he used to keep, or the initial payments the government provided.

Dr. Blackwelder would have to spend $26,400 every month – and $316,800 a year – just to see his patients’ electronic health records from the hospital across the street or other doctors because they might use different services. Alexander pointed out that the electronic health records system, which was supposed to make things easier and simpler, has instead made record keeping more expensive – and Dr. Blackwelder still can’t see the records of a patient released from the hospital he can see from his office window.

See Alexander’s full prepared remarks here.

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