Eliminating Administrative Waste in Healthcare

We sat down with Dan to discuss the $900B problem in healthcare—administrative waste—and how addressing this challenge can make the system work better for everyone. 

Q: What is administrative waste and why does it matter? 

A: Administrative waste is any time-intensive bureaucratic process that does not add value to the patient. Not only does it divert money from clinician salaries and patient care, it also stifles innovation. Administrative related costs are not always bad, but as we think about waste it is ultimately the result of inefficient processes and duplicative efforts.

The US ranks at the top of global per capita healthcare spending, but this does not translate to increased quality of care or patient access. Healthcare is too expensive, and we need to figure out how to optimize our existing resources. There’s a big opportunity to reduce administrative waste by increasing efficiencies within health systems. Improving and streamlining these complicated processes can lower healthcare costs and enable the reallocation of resources to better serve patients.

Q: What happens if we are unable to get administrative waste under control?

A: The Medicare program is effectively heading towards insolvency. We need to act now to control costs in order to maintain, and ideally improve patient access to care. Eliminating administrative waste is one of the most obvious ways we can cut costs without impacting quality of care. We have a moral obligation to ensure that everyone has access to healthcare. In order to do that, we need to make healthcare more affordable.

Q: What does administrative waste mean for health plans? 

A: Under the Affordable Care Act, there is a provision known as Medical Loss Ratio thresholds which was designed to cap health plan profits. Essentially, health plans are required to spend at least 80% of income on clinical care and quality improvement. That leaves 20% to cover administrative costs and line items like marketing. Being a profitable payer is nearly impossible unless they eliminate administrative waste.

Q: How does advancing interoperability (and eliminating waste) result in improved patient outcomes? 

A: Advancing interoperability will enable higher quality patient outcomes and experiences at lower costs. Interoperability will eliminate inefficiencies that directly impact patient care. Getting the right data automatically where it can be used will help clinicians and administrators ensure they find the best care pathways for their patients. Reducing administrative waste will also help improve a patient's experience with the billing and administrative side of healthcare. Interoperability will enable workflow automation that lowers the friction a patient experiences. Less waste will also translate into lower costs for all parties involved.

Q: How do providers benefit from reducing administrative waste?

A: Right now it is tough to be a clinician. People enter the profession because they love helping people, but currently too much of the administrative work has shifted to the intake process and falls on clinical staff. The total amount of documentation and form filling requested from clinicians continues to increase. We’ve seen tons of burnout especially over the last couple of years with frontline clinicians facing immense pressure. By cutting out administrative complexity and waste, caregivers can focus on the patient in front of them. We need to put more empathy into our care and removing administrative friction is part of the solution. 

Q: How can we create a better healthcare system? 

A: By leveraging technology to streamline and simplify antiquated processes, we can make the healthcare system better. For example, now that we’ve digitized medical records we can use the improved context and data from patient encounters to automatically build much of the documentation that’s required to justify the care delivered to patients. If we can automate backend administration so clinicians can stay focused on the patient and the uniqueness of their story, we can strike the right balance of bringing technology into an industry that at its core should be about human connection, care, and wellbeing. By bringing new efficiency to the system we give clinicians a little extra time to connect with their patients. 

As founder and CEO of Moxe, Dan oversees our growing organization, ensuring our strategy aligns with our mission and the evolving needs of the healthcare industry. With a focus on eliminating administrative waste, Dan is dedicated to improving healthcare for all by enabling more effective and efficient collaboration across the healthcare ecosystem.