CHICAGO – The American Medical Association is calling on the business community to help it fight administrative waste in healthcare. A root cause of the $200 billion a year problem, says AMA President Cecil B. Wilson, MD, is lack of standardization.

[See also: Coalition urges simpler healthcare administration.]

In a commentary posted March 7 on the AMA website, Wilson wrote: “The administrative morass of today's system is not working well for anyone. It is complex, redundant, inefficient and costly for all of us – and it is an area where we all share a great deal of frustration.”

The AMA is organizing a work group that embraces the labor, business and employer community, Wilson announced.

“ Our goal is to identify areas of common interest where we can bend the curve of healthcare costs by improving efficiency and simplifying administrative procedures,” he said, noting that in a physician's office, administrative costs represent 10 percent to 14 percent of gross income.

[See also: Docs pessimistic, frustrated with insurers.]

The AMA is promoting a healthcare administrative simplification campaign that promotes a uniform, automated, industry-wide claims processing system for insurers, physicians and patients. Wilson said electronic medical record systems would help this effort.

Another step toward simpler and more transparent claims administration is the health reform law requirement that by Oct. 1, 2012, every health plan must use a unique identifier in healthcare transactions.

Physician offices have to deal with “a staggering amount of paperwork and phone calls before insurance companies will authorize coverage for services and medications for our patients,” Wilson wrote in his blog. “Large amounts of time and money are spent to obtain payment for covered services that already have been provided.”