May 01, 2006

Electronic health cards can lower health costs, says Lt. Gov Moore
Governor’s taskforce working on electronic health ID cards

One-third of every health care dollar is spent on administrative costs, and a lack of standardized electronic health insurance cards is part of the reason, says Lt. Governor John Moore.

Moore today announced the Governor’s Health Care Cost Containment Commission has appointed a taskforce to develop state-wide standards for advanced technology health insurance ID cards.

“Most insured Kansans carry around one or more health insurance cards in their wallet. But unlike ATM cards, credit cards, or even grocery store discount cards, these health insurance cards aren't electronic. That means more time spent doing paperwork, and more money being diverted away from patient care,” said Moore.

“Advanced ID cards are central to improving quality and safety by creating electronic health records, aiding the exchange of health information, and lowering health costs,” Moore continued.

The taskforce will include Kansas health care leaders and will be staffed by the Mid-America Coalition on Health Care, an employer-led Kansas City collaborative.

Large numbers of health insurance claims are rejected for payment simply because of incomplete or inaccurate patient information on the patient’s health plan ID card. A clean claims pilot study completed by the Governor’s Health Care Cost Containment Commission found that approximately 20 percent of claims were denied due to inaccurate or incomplete information about a patient’s coverage.

“Not only will the new card save the administrative costs of processing denied claims, it will also make the patient’s registration process easier,” said Moore. “The system will know immediately that the right patient is being served – a fundamental first step in getting health care.”

This information could be accessed via the electronic cards, reducing claim denials that currently result in significant administrative costs for physicians, hospitals and health plans – costs that are ultimately passed on to patients and employers.

“Eventually we all pay for these unnecessary costs,” said Moore. “One swipe of these new cards and a provider will have immediate access to all necessary information on his or her patient’s health insurance coverage. This will simplify health care administration and improve quality, safety and cost.”

“Health care is the nation’s second largest industry, but it’s burdened by antiquated administrative practices that impact cost, quality and safety,” said William L. Bruning, president of the Mid-America Coalition on Health Care and a taskforce member. “One health plan has estimated that it costs approximately $16 in administrative costs to process every denied physician claim. The potential savings to the Kansas health care system is significant. It is remarkable that the State of Kansas is willing to tackle such a huge problem.”

“This taskforce represents a unique public/private partnership to improve health care,” said Dr. Robert Day, Executive Director of the Kansas Health Policy Authority. “Bringing together all stakeholders in the State’s health care delivery system holds the opportunity not only to develop advanced ID cards, but also to begin fundamental change in the way health care is delivered.” Day said health plans will eventually be required to use the new electronic health insurance cards if they plan on offering health insurance to state employees.

Lt. Governor Moore noted that the Governor’s Health Care Cost Containment Commission has endorsed the Mid-America Coalition on Health Care’s “Best Practice Guidelines” for Patient ID Cards, which have been endorsed by the Healthcare Administrative Simplification Coalition (HASC), a national organization including representatives of such stakeholders as the American Medical Association, American Academy of Family Physicians, Blue Cross Blue Shield Association, Ford and Microsoft.

More information on the Mid-America Coalition on Health Care ID card project can be found on the Mid-America Coalition on Health Care web site, at www.machc.org.

This week marks Healthy America week, in which the nation’s governors are coordinating efforts to promote healthy living and active lifestyles.