As any consumer who had had to go to a hospital recently will tell you, you can spend as much time with the billing and administration department as with your doctor.In fact, almost one out of every three healthcare dollars spent is eaten up by claims and billing administration, according to a recent survey by PNC Financial Services Group Inc. and research group Chadwick Martin Bailey. That's triple what consumers think it should be: 76% believe administration should not exceed 10% of healthcare costs, while 79% want greater administration cost transparency. Employers are upset, too. "So much of the cost [of healthcare] is in the administration," says Mercer Human Resource Consulting CEO Michele Burns, who adds that employers are attacking duplicative costs in healthcare.

One in five claims submitted is delayed or denied, and 96% of all claims must be submitted more than once. For those hospitals that don't use electronic data interchange/electronic funds transfer (EDI/EFT), the picture is worse: Claims, on average, must be resubmitted 11 times or more–nearly four times the rate of those hospitals that adopt EDI/EFT. Insurers, on the other hand, complain that hospitals do not give them the information they need to pay the bills.

While most hospitals see the value in EDI/EFT, says Paula Fryland, executive vice president and manager of PNC's national healthcare group: "Hospitals are spending their capital dollars on clinical care. They're not spending a lot of their money on the back office, accounting systems." She adds that there is a place for banks, such as PNC, to help fill that back-office gap and reduce administrative costs. "We've allowed hospitals to have the electronic connection without having to go out and create it."

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.