The percentage of total health costs associated with administration is estimated to be between 20 and 30%. Private insurance companies account for most of these costs. Health insurance companies spend money to identify individuals with preexisting disorders or with potential to develop a disorder. They also spend money on marketing. Health care providers have high administrative costs associated with working with many different private insurance plans. Processes such as coding and claim submission tend to be both time-consuming and complicated (“Causes of high health care,” n.d.).
Currently, patients are coded into one of five different levels of severity when entering the emergency department (Cutler, 2018). The extent to which severity is coded should be limited to reduce the need to search records to classify patients. The requirements for pre-authorization should be standardized. One companies requirements that must be satisfied before, for example, ordering an MRI may differ greatly from the requirements of another company. Finally, medical record and billing systems should be completely integrated so that health care information can be easily transmitted between systems.
Causes of high health care costs (n.d.). Retrieved September 7, 2019, from https://www.merckmanuals.com/home/fundamentals/financial-issues-in-health-care/causes-of-high-health-care-costs
Cutler, D. M. (2018). Reducing Health Care Costs: Decreasing Administrative Spending. 11.
Stone, P. W. (n.d.). Health Policy and Politics. NURSING ECONOMIC, 35(3), 3.