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Home / News & IndustryManaged Care Insight and Analysis
Updated: November 24, 2009
Technology For Administrative Processes Could Save More Than $300 Billion

By making better use of technological advances and streamlining administrative processes, savings of $332 billion in health expenditures could be achieved over the next decade, according to a report by UnitedHealth Group’s Center for Health Reform and Modernization.

This comes on the heels of a May report in which the center identified $540 billion in potential federal medical cost savings by applying to traditional Medicare some of the techniques UnitedHealth Group uses in the funding and management of care for more than 70 million Americans.

The latest research paper enumerates 12 practical ways in which technology could save money by modernizing the administrative and transactional aspects of healthcare, including:

  • Tighter mandatory data and transaction standards;
  • Elimination of antiquated manual processes, unnecessary paperwork, and redundant intermediaries;
  • Automated payment accuracy processes across the healthcare system;
  • A single credentialing and quality measurement process; and
  • A sophisticated and consistent regulatory regime.

"There is too much administrative waste in our healthcare system, and this report shows how technology can help fix it," said Simon Stevens, executive vice president, UnitedHealth Group, and director of the Center for Health Reform and Modernization. "Patients, physicians, hospitals and insurers will benefit from applying streamlined modern approaches to the day-to-day support of care delivery. Now is the time to insist these changes happen across the healthcare system."

The report estimates that perhaps half of the projected $332 billion savings would accrue to physicians and hospitals; 20 percent directly to government in its role as a healthcare payor through Medicare and Medicaid; and 30 percent to health plans. However, there are various ways in which a higher share of the savings could become available to the federal government.

"Shared action is now needed across all payors – commercial and governmental – in partnership with physicians and hospitals," said David Wichmann, president of UnitedHealth Group Operations, and one of the report’s co-authors. "UnitedHealth Group, for example, now has 30 million magnetic swipe cards in circulation that would eliminate much red tape for patients, but the full potential of these cards will not be realized without agreed upon universal standards adopted across the healthcare system."

Broader use of automated swipe cards could generate administrative cost savings of about $18 billion, according to the report. Other approaches aimed at administrative simplification and cost efficiencies include creation of a national payment accuracy clearinghouse ($41 billion), and elimination of paper checks and paper remittance advice ($109 billion).

To view the full report, visit

Address: UnitedHealth Group, 9900 Bren Rd E, Minnetonka, MN 55343; (952) 936-7235,

  This article was taken from:
Healthcare Reimbursement Monitor

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