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Federal regulations are imposing multiple burdens on healthcare providers, making it harder for them to see patients and control expenses, while also undermining the benefits of technology, industry experts said during a Senate health committee hearing Tuesday on how to reduce administrative spending.
Sen. Lamar Alexander (R-Tenn.), chairman of the Senate health committee, said in his opening statement that administrative costs account for 8 percent of the nation’s healthcare spending vs. only 1 percent to 3 percent in other countries.
“Administrative costs are much higher in the United States than in other countries,” said Sen. Lamar Alexander (R-Tenn.), chairman of the Senate health committee. “According to Dr. Ashish Jha, a witness at our first hearing, administrative costs accounted for 8 percent of all healthcare spending in the U.S. … compared to only 1 percent to 3 percent for other countries.
While acknowledging that many administrative tasks in the healthcare system are related to insurance companies or state requirements, Alexander said “the federal government is clearly at fault for some of this burden.”
Witnesses testifying at the Senate hearing were quick to agree.
“In the U.S., one of the most substantial administrative costs at all levels of healthcare is regulatory compliance,” said Robert Book, a health economist and advisor to the American Action Forum think tank. Book told Senate committee members that electronic health records (EHRs) have failed to reduce unnecessary tests and diagnostic procedures, as promised.
“Hospitals continue to repeat tests previously done by other providers, perhaps to validate the results, or perhaps because they get paid for doing the tests again—or perhaps both,” Book said. “In this case, a known administrative cost was supposed to reduce actual healthcare costs, but it failed to do so.”
Becky Hultberg, president and CEO of the Alaska State Hospital and Nursing Home Association, said EHRs cost a lot of money but don’t always result in better care.
"Technology can be a help, but right now it sometimes is a hindrance," she testified. “As an example, Wrangell, this tiny medical center on an island, is going to spend $65,000 this year on upgrading [its EHR] to meet stage three meaningful use. They’re not going to see patient benefit for those dollars, they’re having to purchase a software package that has functionality they don’t need. And earlier this year Wrangell had less than 10 days cash on hand.”
The federal government since 2011 has spent $38 billion requiring doctors and hospitals to install EHRs to meet meaningful use mandates, Alexander said.
“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,” he said. “Unfortunately, electronic health records systems have ended up being something physicians too often dread, rather than a tool that’s useful.”