Pileup of Health Care Paperwork Targeted

Health and Human Services Secretary Louis W. Sullivan promised Tuesday “to slash the red tape” that binds the health care industry to an inefficient and costly system of paper documentation.

“Americans should go to the doctor to be cured of their illnesses, not be made sick by the paperwork,” he said during a news conference after a forum on health care administrative costs.

Sullivan said that the forum, at which 19 hospital and insurance company executives met for several hours with government officials, resulted in a commitment to limit their operating costs. The key point of their discussions centered on an ambitious goal of consolidating the industry’s disparate forms, claims and billing procedures into a computerized system.

Officials said that their ultimate goal is to give every American with health insurance a card with a magnetic strip that contains the person’s medical history and insurance information. Under such a system, a hospital official would run the card through a scanner to collect information needed to treat a patient and bill an insurer.

Carl Schramm, president of the Health Insurance Assn. of America, said that such a system would eliminate considerable amounts of paperwork associated with medical visits. “When you’re through with the doctor, all transactions will have been completed,” he said.

Sullivan challenged industry leaders to increase the number of claims moved electronically, rather than by shuffling paper, by at least 10% annually. He promised that the federal government would reduce some of the administrative requirements embedded in federal health care programs.

Although Sullivan said that those attending the forum were not in complete agreement over how great the savings would be, Schramm estimated that the computer operations could whittle about $8 billion from the industry’s overhead costs.

While reducing industry operating costs may result in savings to health care providers and insurers, it may not significantly curb the nation’s swelling cost of health care. According to 1990 figures from the Health Care Financing Administration, total industry operating costs amount to $30.7 billion, or about 4.6% of the national health care bill. The proposals do nothing to assist the estimated 30 million Americans without health insurance.

Sullivan said that any failure by the health care industry to embrace these ideas could harm their own futures, possibly leading to increased political pressure to scrap the present insurer system.

“Americans should not accept radical departures from a system that offers them so much,” he said, disparaging calls for a form of national health insurance. “These goals and changes will mean improvements, less hassle, and savings in our health system. It doesn’t mean that all of our health care problems are solved. But it means that those of us in government and the private sector have taken an important step forward to improve the system.”