Sullivan Plans Summit on Medical Costs : Health care: The secretary dismisses the idea that paperwork is a major cause of high bills.
Health Secretary Louis W. Sullivan on Monday expressed serious doubt that medical costs could be slashed by reducing red tape, but announced that he will call a meeting of insurance executives to pursue that possibility.
Sullivan said he believes that some savings could be achieved by streamlining administrative costs, but he dismissed the finding of several recent studies that large cuts could be realized.
Sullivan said he has become “increasingly concerned that the public is being given a very misleading picture of the potential cost savings achievable through decreasing administrative costs.”
The scope of the administrative burden has been a rallying point for those who advocate a radical overhaul, including universal coverage in a government-run system of insurance.
Some studies have concluded that administrative costs account for 20% or more of the $600 billion spent annually on medical care in the United States.
“We think these studies are flawed and that the public is being misled,” Sullivan said, speaking at a health-care conference here. “Nevertheless, we do believe an examination of administrative burdens is long overdue.”
The government-industry summit will be “in the next month or so,” Sullivan said.
The Health Insurance Assn. of America has said that administrative expenses account for about 13% of private doctor and hospital bills.