Ron F. Shinkman

May 1, 2005

1 Min Read
The Big Target

Originally Published MX May/June 2005

INFORMATION TECHNOLOGIES

Without much assistance from medical device manufacturers, a number of IT firms are taking aim at reducing the costs of healthcare administration.

Ron F. Shinkman

According to recent reports, nearly a third of every healthcare dollar spent in the United States goes to cover administrative costs. On a total expenditure base of roughly $1.7 trillion, that amounts to $578 billion each year—and counting.

Identifying the sources of such costs can be a complex task. Among the most obvious sources are the time required to create and process patient health records, data entry for hospital information and billing systems, and the processing of claims for third-party payers. But administrative costs also arise from the scheduling of patient appointments, filing and recovery of patient records, and handling of patient referrals. And none of these areas even remotely touch on administrative costs related to a healthcare setting's management of professional staffing, legal affairs, regulatory compliance, or physical plant.

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