Fraud, waste abuse and errors (FWAE) are primary drivers of healthcare costs. Here’s how technology can reduce FWAE and associated healthcare administrative costs.
Modernizing current or implementing new technology can lower administrative and healthcare costs. It can reduce errors and shorten account payable/receivable cycle times in cash sensitive businesses. And it can streamline business processes while providing richer insights into administrative operations and patient care.
The rising cost of healthcare – currently about 18% of GDP – continues to threaten our economic well being. This expense represents a collective burden and opportunity to streamline this increasingly important sector of our economy.
Because administrative costs are so large – about 30% of overall healthcare spending in the U.S. – payers, providers and other healthcare players can achieve significant savings through incremental increases in process efficiency. Technology supported improvements in workflow and business process, research and error resolution and analysis can contribute to this.
Reducing FWAE costs
Fraud, waste, abuse and errors (FWAE) may be the most intent area of cost reduction. Estimates from the National Healthcare Anti-Fraud Association suggest that anywhere between $100B and $300B is annually wasted in dealing with fraud and error in the U.S. That represents 3-10% of every dollar spent on healthcare in the United States.
A recent study in the Journal of American Medicine finds that when we also account for waste and inefficiency, that number skyrockets to between $760B and $935B. That’s 25% U.S. healthcare spending lost to inefficiency.
During the paper-based healthcare era, it was challenging to identify when FWAE events occurred. With the continued adoption of electronic healthcare tools, such as electronic health records, hospital information systems and intelligent adjudication and fraud analysis platforms, the industry has made significant progress. This evolution enables healthcare organizations to transition from being observers to being empowered to identify, prevent and address these events as they occur.
Detecting fraud as it happens allows for far more effective outcomes than chasing it after the fact. Fraud recovery rates across most industries remain exceptionally low. Using robust technology to proactively prevent or intercept FWAE as they occur is a winning position.
Increased access to relevant and meaningful data, coupled with a robust technology solution and supported by a process and training transition to make use of these tools, is essential to an organization making inroads against FWAE costs. A combination of off-the-shelf and custom solutions leveraging emerging technologies such as AI and machine learning, natural language processing across records/episode information and increases in compute and processing flexibility all unite to provide a new generation of tools and options.Read more about how to use technology to increase the speed of healthcare innovation