Automation could save the health care industry $11.1 billion annually

Although tremendous cost and time savings are to be had through the adoption of automation and artificial intelligence in the claims and payment processes, the health care industry is slow to make the transition.

According to new data from the Council for Affordable Quality Healthcare Inc., while the industry has progressed in automating claims-related business processes, they’re missing out on $11.1 billion in annual savings.

“Understanding the industry cost of phone inquiries and paper/fax submissions reveals whether or not we are in line with the collective average,” says Tab Harris, senior director with Florida Blue. “Knowledge of the electronic cost validates our vendor expense, and understanding the provider’s cost presents an opportunity to promote and facilitate self-service e-capabilities.”

The CAQH Index tracks adoption of seven common medical and five common dental “electronic administrative transactions” by health plans and health care provider and calculates potential cost and time savings. These actions include: verifying insurance coverage; sending and receiving payments; inquiring about the status of a claim; and obtaining prior authorization for care.

Related: How technology is improving the health care experience

Based on its data, the index estimates a potential savings increase of $1.8 billion compared to the prior year. It’s the second year in a row in which potential industry savings have grown; the full amount would represent what could be saved should the industry move to full adoption of electronic transactions.

The bulk of the savings–$9.5 billion– according to the report, would go to health care providers, including about $2 billion that would go to dental providers.

If all seven business transactions benchmarked by the Index were fully automated, a provider practice could save an average of nearly 40 minutes, as well as more than $15 in direct cost savings; for dental claims, if all five benchmarked transactions were automated, the savings for the practice would be an average of nearly 30 minutes and $11.75 in costs.

And while a $5 million boost in software-as-a-service bookings for one company so far this year alone indicates that the trend is definitely moving toward automation, in some areas providers have actually gone backwards in the percentage of transactions that are automated. Recondo Technology reports that its cloud-based, AI-driven automation for revenue-cycle departments experienced that $5 million in growth just in the first six months of 2018, reaching beyond hospitals to include “a large integrated care delivery networks, several major universities and an affiliated large physician group.”

It adds that existing customers are moving beyond claims processing and less complex processes to include its automated prior authorization offering, among other functions. And that’s where the trend has been moving backward, according to the CAQH Index. It’s not that companies aren’t automating processes but because the number and complexity of transactions is growing thanks to a rise in online portal use, which saw a 55 percent increase in manual transactions over the past year.

The authors of the Index warn that the slow rate of progress will continue to bog down the health care industry and recommends greater emphasis on investment in automated systems and education on their importance.