Health providers believe they’ll need to make better use of technology to offset proposed cuts in Medicare reimbursement, according to a survey by IVANS.

IVANS, the IT solutions provider, conducted this survey to gauge health providers’ perspectives on health reform and the impact of proposed Medicare cuts on operations.

About 1 in 3 health providers views technology as a way to deal with downward trends in Medicare reimbursement, as the chart illustrates. Thus, providers are connecting the dots between the role of health care IT to reduce operating expenses, especially administrative costs.

In the conclusion of its survey summary report, IVANS, which competes in the health IT implementation space, argues for the role of technology in reducing operating costs such as high-speed networks’ role in replacing dial-up telephone systems.

Health Populi’s Hot Points: As providers plan to manage their health care operations in a scenario of proposed cuts from Medicare, and potentially private payers as well, technology can indeed play a role in streamlining manual processes and in replacing expensive labor. A conservative estimate is that 30% of health costs in the U.S. go to administrative waste. The U.S. Healthcare Efficiency Index (a project with which I am affiliated) calculates that the U.S. health system is only at 43% efficiency.

There are several administrative simplification provisions that would move the needle on health care paper-based administrative waste in the Senate Finance Bill, including:

  • A timeline for accelerating existing HIPAA transactions
  • Adding electronic funds transfer (EFT) as a required transaction
  • A requirement that by 2014, no Medicare payment under Part A or Part B be made other than EFT or an electronic remittance, among others.

While a growing cadre of providers sees the merits in going electronic, IVANS research reveals a chasm between that belief and movement toward adopting these systems, pointing to a “wait-and-see” attitude among many health providers. Other providers, if adopting, may be doing so in a piecemeal fashion.

In the meantime, potential technology benefits notwithstanding, a plurality of health providers are worried that Medicare cuts will lead to layoffs and lower salaries in the practice, and reduced quality of care for patients.

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