Editing Openai/692cb885-da9c-8002-9696-e985fae204bd (section)

===== Private Sector Efforts to Reduce Admin Burden =====

Just as with prices, private stakeholders are taking steps to simplify administration even before any sweeping national reform:
* Provider Practice Consolidation of Admin Tasks: Smaller physician offices often find the administrative load overwhelming. In response, some have joined independent practice associations (IPAs) or accountable care organizations that centralize admin services (e.g., one back-office handles billing for 50 doctors). By sharing admin infrastructure, each provider’s cost goes down due to economies of scale. Similarly, hospitals outsourcing or centralizing certain admin functions (like one central credentialing service for all hospitals in a system) can reduce duplication.
* Technology Solutions (Automation and AI): Tech firms are developing AI tools to automate coding, read documents, and even handle prior auth submissions. For example, optical character recognition and AI can process faxed clinical notes from one provider and auto-fill required fields for an insurance claim or referral, saving staff time. Robotic process automation can take over repetitive tasks like insurance verification. The CAQH Index highlights that transitioning remaining manual transactions (calls, faxes) to electronic could save $20 billioncaqh.org<ref>{{cite web|title=caqh.org|url=https://www.caqh.org/blog/new-caqh-index-reveals-20b-savings-opportunity-to-cut-waste-reduce-costs-and-improve-patient-access#:~:text=,efficiency%20and%20the%20patient%20experience|publisher=caqh.org|access-date=2025-11-30}}</ref>caqh.org<ref>{{cite web|title=caqh.org|url=https://www.caqh.org/blog/new-caqh-index-reveals-20b-savings-opportunity-to-cut-waste-reduce-costs-and-improve-patient-access#:~:text=,efficiency%20and%20the%20patient%20experience|publisher=caqh.org|access-date=2025-11-30}}</ref> – and as AI improves, it could cut even deeper into the overhead by taking on tasks that currently require human intervention.
* Reducing Administrative Touchpoints: Some insurers are experimenting with approaches like “gold carding” for prior authorization – i.e., if a doctor has a history of appropriate requests, they waive PA requirements for that doctor. This kind of policy, if adopted widely, could eliminate a chunk of the busywork for providers who consistently follow evidence-based practices. Insurers also stand to gain because it improves provider relations and reduces their own admin costs from processing PAs. A few major insurers have announced plans to eliminate nearly 20% of current PA requirements due to provider feedback.
* Member-Friendly Administrative Simplification: On the insurance side, companies are trying to simplify things like claims explanations of benefits (EOBs) and customer service interactions. While this is more about consumer-facing admin rather than provider-facing, it still contributes to overall efficiency. If members can easily understand their coverage and claims, they make fewer calls and appeals, which reduces administrative workload for the insurer.
* Competitive Pressure to Lower Overhead: With rising premiums, large employers are demanding that insurance carriers reduce their administrative costs. Some employers are even moving to self-administration or using third-party administrators who promise lower overhead than traditional insurers. There’s a growing market for more efficient, tech-driven claims administrators (e.g., some startups claim they can run health plan admin with single-digit percent overhead). This competitive pressure may force legacy insurers to cut down on layers of bureaucracy to offer better pricing.
* Financial Impact: While private initiatives individually might have modest effects, together they can improve the system’s efficiency. If AI and automation cut just 5% of current hospital administrative staff costs, that could save on the order of $10–15 billion per year (given hospitals spend >$200B on admincommonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=rural%20facilities%20,quality%20care|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>). If insurers streamline and cut their overhead by even 1 percentage point (e.g., from 15% of premium to 14%), that could mean tens of billions saved across the insured population in premiums or rebates. These savings often manifest as slower premium growth or the ability to invest in other areas (like care management). For providers, reducing admin burden frees up physician and nurse time – which, while hard to price, could indirectly improve productivity (more patients seen or more time per patient to improve outcomes). In summary, private sector efforts show that not all solutions need to wait for legislation; many efficiencies can be captured with existing technology and better management, though a supportive policy environment (with clear standards and incentives) can accelerate and amplify these gains.

Conclusion: High medical prices and administrative complexity are deeply intertwined problems making U.S. healthcare financially unsustainable. High prices extract resources from taxpayers, employers, and families, while excessive administrative waste diverts billions that could be used for actual care. The policy and financial analyses above suggest that comprehensive reforms – combining price regulation (or robust market discipline) with administrative simplification – could yield hundreds of billions of dollars in savings annually. Achieving these savings involves trade-offs and careful design: price controls must safeguard quality and access, and admin cuts must not compromise necessary oversight or patient privacy. Nonetheless, the experience of other countries and successful pilot programs domestically demonstrate that it is possible to “bend the cost curve” without harming outcomes, by paying smarter and streamlining how care is delivered and paid for. Policymakers at every level, along with private sector leaders, have an opportunity to implement these solutions. Over time, reining in prices and administrative waste will not only make healthcare more affordable, but also refocus the system’s energies on what truly matters – delivering high-quality, efficient care to patients.

Sources:
# KFF – Health Care Costs and Affordability (2023)kff.org<ref>{{cite web|title=kff.org|url=https://www.kff.org/health-costs/health-policy-101-health-care-costs-and-affordability/#:~:text=The%20U,name%20prescription%20drugs%2C%20hospital|publisher=kff.org|access-date=2025-11-30}}</ref>kff.org<ref>{{cite web|title=kff.org|url=https://www.kff.org/health-costs/health-policy-101-health-care-costs-and-affordability/#:~:text=U,large%20and%20wealthy%20countries%20do|publisher=kff.org|access-date=2025-11-30}}</ref>
# Peterson-KFF Health System Tracker – What drives U.S. health spending vs. other countries (2023)healthsystemtracker.org<ref>{{cite web|title=healthsystemtracker.org|url=https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/#:~:text=The%20largest%20category%20of%20health,S|publisher=healthsystemtracker.org|access-date=2025-11-30}}</ref>healthsystemtracker.org<ref>{{cite web|title=healthsystemtracker.org|url=https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/#:~:text=Spending%20on%20health%20administration%20is,party%20payers%20and%20programs|publisher=healthsystemtracker.org|access-date=2025-11-30}}</ref>
# Peterson-KFF Health System Tracker – Inpatient/Outpatient costs as main driver of spending gap (2023)healthsystemtracker.org<ref>{{cite web|title=healthsystemtracker.org|url=https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/#:~:text=Image|publisher=healthsystemtracker.org|access-date=2025-11-30}}</ref>healthsystemtracker.org<ref>{{cite web|title=healthsystemtracker.org|url=https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/#:~:text=health%20spending%20in%20the%20U,on%20average%20in%20comparable%20countries|publisher=healthsystemtracker.org|access-date=2025-11-30}}</ref>
# Milbank Memorial Fund – How States Strengthened Health Care Markets in 2025milbank.org<ref>{{cite web|title=milbank.org|url=https://www.milbank.org/publications/how-states-strengthened-their-health-care-markets-in-the-2025-legislative-session/#:~:text=There%20is%20clear%20evidence%20that,Private%20equity|publisher=milbank.org|access-date=2025-11-30}}</ref>milbank.org<ref>{{cite web|title=milbank.org|url=https://www.milbank.org/publications/how-states-strengthened-their-health-care-markets-in-the-2025-legislative-session/#:~:text=In%20June%202025%2C%20Vermont%20became,are%20passed%20along%20to%20ratepayers|publisher=milbank.org|access-date=2025-11-30}}</ref>
# Milbank Memorial Fund – State reference-based price caps and savingsmilbank.org<ref>{{cite web|title=milbank.org|url=https://www.milbank.org/publications/how-states-strengthened-their-health-care-markets-in-the-2025-legislative-session/#:~:text=This%20policy%20has%20a%20proven,Advancing%20Health%20Policy%20through%20Research|publisher=milbank.org|access-date=2025-11-30}}</ref>milbank.org<ref>{{cite web|title=milbank.org|url=https://www.milbank.org/publications/how-states-strengthened-their-health-care-markets-in-the-2025-legislative-session/#:~:text=Like%20Vermont%2C%20Indiana%20also%20established,nonprofit%20hospital%20fails%20to%20meet|publisher=milbank.org|access-date=2025-11-30}}</ref>
# KFF – Price Regulation, Global Budgets, and Spending Targets (2023)kff.org<ref>{{cite web|title=kff.org|url=https://www.kff.org/health-costs/price-regulation-global-budgets-and-spending-targets-a-road-map-to-reduce-health-care-spending-and-improve-affordability/#:~:text=quality%E2%80%94key%20considerations%20for%20any%20proposal,margin%20services%20or%20care|publisher=kff.org|access-date=2025-11-30}}</ref>kff.org<ref>{{cite web|title=kff.org|url=https://www.kff.org/health-costs/price-regulation-global-budgets-and-spending-targets-a-road-map-to-reduce-health-care-spending-and-improve-affordability/#:~:text=In%202017%2C%20lawmakers%20in%20Oregon,costs%2C%20in%20a%20plan%20year|publisher=kff.org|access-date=2025-11-30}}</ref>
# Reuters – Medicare drug price negotiations save 36% on 15 medicines (2025)reuters.com<ref>{{cite web|title=reuters.com|url=https://www.reuters.com/business/healthcare-pharmaceuticals/us-negotiated-medicare-prices-15-more-drugs-test-cost-savings-promise-2025-11-25/#:~:text=Nov%2025%20%28Reuters%29%20,in%20net%20covered%20prescription%20costs|publisher=reuters.com|access-date=2025-11-30}}</ref>reuters.com<ref>{{cite web|title=reuters.com|url=https://www.reuters.com/business/healthcare-pharmaceuticals/us-negotiated-medicare-prices-15-more-drugs-test-cost-savings-promise-2025-11-25/#:~:text=Analysts%20said%20they%20will%20also,nation%20pricing%2C%20or%20MFN|publisher=reuters.com|access-date=2025-11-30}}</ref>
# NASHP – State policies addressing health care prices (2025)nashp.org<ref>{{cite web|title=nashp.org|url=https://nashp.org/state-legislatures-pursue-policies-to-address-high-health-care-prices/#:~:text=,hospital%20and%20health%20system%20costs|publisher=nashp.org|access-date=2025-11-30}}</ref>nashp.org<ref>{{cite web|title=nashp.org|url=https://nashp.org/state-legislatures-pursue-policies-to-address-high-health-care-prices/#:~:text=,health%20plans%20in%20the%20state|publisher=nashp.org|access-date=2025-11-30}}</ref>
# Commonwealth Fund – High U.S. Health Care Spending: Where Is It All Going? (2023)commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/issue-briefs/2023/oct/high-us-health-care-spending-where-is-it-all-going#:~:text=,and%20peer%20nation%20health%20spending|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>
# American Progress – Excess Administrative Costs Burden the U.S. Health Care System (2019)americanprogress.org<ref>{{cite web|title=americanprogress.org|url=https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/#:~:text=Each%20year%2C%20health%20care%20payers,annually%2C%20according%20to%20CAP%E2%80%99s%20calculations|publisher=americanprogress.org|access-date=2025-11-30}}</ref>americanprogress.org<ref>{{cite web|title=americanprogress.org|url=https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/#:~:text=addressing%20waste,annually%2C%20according%20to%20CAP%E2%80%99s%20calculations|publisher=americanprogress.org|access-date=2025-11-30}}</ref>
# Commonwealth Fund – Hospital Administrative Costs in Eight Nations (2014)commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=,5%20percent%20of%20total%20hospital|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=Administrative%20costs%20account%20for%2025,than%20%24150%20billion%20in%202011|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>
# CAQH – 2024 CAQH Index Highlights (2025)caqh.org<ref>{{cite web|title=caqh.org|url=https://www.caqh.org/blog/new-caqh-index-reveals-20b-savings-opportunity-to-cut-waste-reduce-costs-and-improve-patient-access#:~:text=,efficiency%20and%20the%20patient%20experience|publisher=caqh.org|access-date=2025-11-30}}</ref>caqh.org<ref>{{cite web|title=caqh.org|url=https://www.caqh.org/blog/new-caqh-index-reveals-20b-savings-opportunity-to-cut-waste-reduce-costs-and-improve-patient-access#:~:text=,efficiency%20and%20the%20patient%20experience|publisher=caqh.org|access-date=2025-11-30}}</ref>
# Hamilton Project – Proposal to Reduce Administrative Costs (2022)hamiltonproject.org<ref>{{cite web|title=hamiltonproject.org|url=https://www.hamiltonproject.org/assets/files/Cutler_PP_LO.pdf#:~:text=patients,150%20per%20person%20per%20year|publisher=hamiltonproject.org|access-date=2025-11-30}}</ref>hamiltonproject.org<ref>{{cite web|title=hamiltonproject.org|url=https://www.hamiltonproject.org/assets/files/Cutler_PP_LO.pdf#:~:text=The%20Proposal%20Establish%20a%20clearinghouse,automating%20prior%20authorization%20could%20help|publisher=hamiltonproject.org|access-date=2025-11-30}}</ref>
# PGPF – U.S. vs. other country administrative spending (2025)pgpf.org<ref>{{cite web|title=pgpf.org|url=https://www.pgpf.org/article/how-does-the-us-healthcare-system-compare-to-other-countries/#:~:text=hospitals%20%E2%80%94%20leading%20to%20a,the%20same%20amount%20on%20both|publisher=pgpf.org|access-date=2025-11-30}}</ref>
# Commonwealth Fund – No link between admin costs and quality; global budgeting lowers admincommonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=product%20%28GDP%29%20rose%20from%200,quality%20care|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=Hospital%20administration%20costs%20ranged%20from,in%20Canada|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>