Health Care Reform: Proposals Have Potential to Reduce Administrative Costs

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Report Type	Reports and Testimonies
Report Date	May 31, 1994
Report No.	HEHS-94-158
Subject	Administrative costs Claims processing Comparative analysis Health care cost control Health care planning Health insurance Health insurance cost control Managed competition Managed health care Medicaid National policies Proposed legislation Health care reform CalPERS Health Benefits Program (CA) Clinton Health Care Plan Federal Employees Health Benefits Program Health Insurance Plan of California Health Security Act

Summary:

Americans today receive health insurance from a multitude of sources, including more than 1,200 commercial insurers; 550 health maintenance organizations; 69 Blue Cross and Blue Shield plans; thousands of self-insured plans run by private employers; and government programs, such as Medicaid and Medicare. Many believe that the complexity of this insurance system contributes to the nation's high per capita health care costs. One of the aims of health care reform is to enhance administrative efficiency. To the extent that reform simplifies insurance administration, it may be able to cut costs. Any savings in administrative expenses could be applied to other valuable ends, such as expanding access and improving quality. This report examines the administrative cost implications of alternative reform proposals, including a single-payer plan and three managed competition plans, and compares their administrative cost savings potential.

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Health Care Reform: Proposals Have Potential to Reduce Administrative Costs