Articles
RSSStudy: E-Commerce Could Save Billions for Health Industry
June 6, 2000
Previously, the U.S. government had estimated a $1.5 billion saving over five years by shifting transactions to the net.
The "1999 Managed Care Benchmarking Study" says moving from paper to electronic claims processing could produce the greatest savings. For example, the survey indicates that if the number of claims processed electronically was raised 70%, administrative costs would be cut in half, saving $1.26 billion annually.
Selling health insurance policies directly on the Internet could free up another $756 million by reducing broker and agent fees while creating other sales and marketing efficiencies, the study found.
Currently, only 14% of managed care organizations routinely use the Internet to communicate with members and clients. By increasing the rate of online enrollment to 40%, plans could save between $432 million and $648 million in annual costs.
Ernst & Young's figures do not include estimates regarding Medicare and Medicaid. Actual savings to the health care industry could far exceed the study's $1.8 billion to $3.6 billion in projected savings if electronic transaction processes are broadly implemented, the study contends.
Leading the shift to e-commerce, the study shows, are small to mid-sized regional plans, which don't have huge budgets. Also credited are electronic standardization requirements through the federal Health Insurance Portability and Accountability Act which is accelerating the move to harness the power of technology.
Ernst and Young's analysis of the impact of e-commerce is based on a larger study of health plans representing more than 26 million enrollees. The study assesses the performance of managed care organizations based on more than 1,000 operating measures.
Source: E-Dental.com, sister website to Medical Design Online.
