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Reducing admin costs for health care organizations

Bill Barbato, Chief Growth Officer, Optum Financial Payments | August 23,  2022 | 1-minute read

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More savings, satisfaction and simplification

Digital adoption of health care and payment solutions can be of immense value. The many benefits include administrative savings, improved provider satisfaction and sharing in the benefits of cost avoidance, workflow simplification and the modernization and digitization of provider payments and remittances. 

Addressing pain points

Some of the main challenges and problems that payers experience include: 

  • Making sure organizations remain compliant while not overpaying
  • Slashing administrative costs without loss of efficiency
  • Reducing negative impacts on the organization while also improving customer satisfaction

These sound daunting, but research shows that reducing administrative costs is one of the most effective and efficient ways to quickly yield positive changes in several areas within a health care organization. 

Deploying a solution

To aid in improving relationships with providers, payers need to look for ways to streamline the payment settlement process. Modernizing payments reduces print-payment related costs and helps keep administrative costs to a minimum.

Every year, Optum Financial conducts focus groups and surveys with payers and providers to learn about pain points and challenges they may experience in their payment process. In our conversations with providers, we found that most expect near-immediate access to funds from payers and see the way they get paid as an important touchpoint with payers. Not surprisingly, many health plan payers have implemented strategies to improve their payment process but still face too many manual processes and administrative costs related to billing errors and reimbursements. Our research also found that paper checks are somewhat prevalent when paying providers particularly for out of network claims. 

Data from the 2022 CAQH Index found that increased automation and streamlined processes have reduced costs in our health care system by $187 billion annually. The cost savings opportunity associated with the adoption of electronic claim payments for the medical and dental industries is $1.4B. CAQH estimates medical providers can save an average of 4 minutes per transaction when adopting electronic claim payments.

Electronic payments are becoming increasingly popular due to higher volume in transaction and payers' modernization efforts. In the first quarter of 2023 alone, NACHA estimated health care processed 116 million EFTs, an increase of over 10% from the same 2021 period. [2] Compliance, cost reduction, and security are some of the main drivers behind the growth of digital payments in health care. To remain competitive and financially stable, payers will have to prioritize the digitization of payments.

Breaking new ground

From the digitization of payments and remits to the most comprehensive payment modalities in the industry, including security and compliance, 1099 reporting and filing, we can help health care organizations create efficiencies and enhance their current processes. Our goal is to modernize the payment process, reduce payment-related costs and drive electronic payment adoption.

See how your organization can save money

Let’s talk about how our low-cost electronic options can increase efficiencies in your organization.