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CAQH 2019 Index: $13.3 Billion, 33 Percent of Healthcare Administrative Spend, can be Saved Annually Through Automation

CAQH® today released the seventh annual report measuring the progress made by the healthcare industry in reducing the costs and burden associated with administrative transactions through automation. The 2019 CAQH Index found that, of the $350 billion dollars widely cited as the cost of administrative complexity in the US healthcare system, $40.6 billion is spent on eight administrative transactions. Of that, the industry can save $13.3 billion, or 33 percent of existing annual spend, by transitioning to fully electronic processes. While the industry has already avoided $102 billion annually by automating administrative transactions, significant opportunities for additional savings remain for both the medical and dental industries.

“While a greater percentage of business transactions are now conducted electronically, the U.S. continues to spend more on healthcare administration than any other nation,” said Kristine Burnaska, Director of Research and Measurement at CAQH. “The Index offers a roadmap for those areas where further automation can drive down costs and burdens for both providers and plans.”

The Index analyzes levels of automation, spending and savings opportunities for eight administrative transactions related to verifying patient insurance coverage and cost sharing, obtaining authorization for care, submitting claims and supplemental information and sending and receiving payments. Of the $13.3 billion in potential savings through automation, $9.9 billion can be saved by the medical plans and providers, while $3.4 billion can be saved by the dental industry. In both industries, the greatest savings exist for providers as compared to plans.

The 2019 CAQH Index proposes actions that can most significantly reduce provider burden and support the automation needs of the medical and dental industries. It also includes a call to action for greater collaboration across industry stakeholders to harmonize and accelerate approaches that can accommodate emerging market needs. For example, standards and operating rules must be updated more quickly to support changing technology, payment models and patient care delivery strategies.

“While the industry has reduced administrative complexity by automating fee-for-service processes, our healthcare system is evolving,” said April Todd, Senior Vice President, CORE and Explorations at CAQH. “As the industry transitions to value-based payment models, and the need for interoperable administrative and clinical systems becomes more acute, we need to adapt in order to maintain and improve upon the progress made to date.”

Learn more in the 2019 CAQH Index.

Register for a CAQH webinar discussing these findings being held on January 23rd, 2020 at 12:30pm ET.