Stethoscope with Pen, Charts and Graphs

Report Shows Over Half of Administrative Healthcare Spending Considered ‘Wasteful’

Healthcare organizations work hard to serve patients, but not all their efforts are as impactful as they could be, according to a recent study. The study found that administrative waste makes up 15% to 30% of healthcare spending. While not all administrative spending is wasteful, the study found that about half of it is likely ineffective.

In theory, addressing this should be simple: Find out what’s causing this waste and fix it. In reality, it’s a bit more complicated.

Death by a thousand cuts

Long before it became the title of a Taylor Swift song, this phrase referred to the significant negative impact seemingly small problems make over time. Healthcare’s administrative waste isn’t the result of one big inefficient task; rather, it’s the cumulative effect of all the smaller ones. And the amount of time spent on these “small tasks” has increased.

In 2014, healthcare providers reported spending almost nine hours a week on administrative tasks. That number has steadily grown, with 70% of doctors now reporting they spend 10 to 20 hours each week on these activities.

Increased volume isn’t the only issue – it’s also how the work gets done.

For instance, when a clinician or staff member works from a physical stack of medical records, they must flip through the pages to find the necessary data. All that flipping and searching takes time. Once they finally locate the data, they stop to read it – finally arriving at the knowledge part of their job, i.e., the higher-level task. Healthcare payers, too, lose valuable hours with processes that rely too heavily on manual efforts and paper.

Every time you switch tasks, your productivity takes a hit. And if you do this too much, at the end of the day it’s easy to feel like you hardly touched your to-do list. It’s defeating for employees and costly for organizations.

Harvard Business Review conducted a study to figure out the cost associated with switching tasks and toggling through applications. It found that users changed between apps and websites nearly 1,200 times a day. As a result, they spent almost four hours a week reorienting themselves after switching tasks, adding up to five workweeks a year, or 9% of their annual work hours.

Constantly switching between tasks means that employees must continually refocus. This fragmented attention span puts a dent into their ability to make progress on their daily to-do list.

Here’s where another adage comes to mind.

Work smarter, not harder

Technology helps reclaim your employees’ time and energy. With automated data capture and classification, efficient workflows deliver the information they need to them and eliminates the tedious, repetitive tasks that drain one’s energy – like searching through a stack of medical records for a single data point.

Integrations and tools like electronic process workflows ingest and centralize content, streamline tasks and reduce inefficiencies. This comes in handy for healthcare payers who must comply with new regulations, like the No Surprises Act, which requires plans to complete a provider directory verification every 90 days, a typically very manual, time-consuming task.

The healthcare industry creates and manages more data than ever. Inefficiencies around how organization manage and how employees work with all of that content certainly contributes to administrative waste.

To eliminate waste in healthcare, or any industry for that matter, perhaps the answer really isn’t all that complicated after all: Identify the worst-offending processes and leverage technology to improve them.