New HCFO Grant Examines Administrative Complexity

Title: Administrative Costs Associated with Third Party Payment
Grantee Institution: University of California, San Francisco
Principal Investigator: Harold Luft, Ph.D.
Grant Period: September 1, 2005 - September 1, 2006
Email: hluft@itsa.ucsf.edu
Awarded: $115,700

The researchers are exploring the functional components and attendant costs of payment administration in an outpatient setting, the Palo Alto Medical Foundation (PAMF). They are examining the procedures to obtain payment for delivered services, as well as activities required by insurers, such as credentialing and reporting. The researchers are addressing two research questions: 1) what administrative functions are performed, and at what cost, to obtain third-party payment in a large, multi-specialty medical group practice; and 2) how would altering insurance or payment mechanisms affect administrative functions and costs? Because the PAMF has three divisions with notable operating differences, the researchers have a unique opportunity to explore what advantages, if any, may accrue from incorporating health information technologies into billing and insurance related functions within the current insurance system. The objective of this project is to provide policymakers with estimates to assess the cost implications of insurance reform options, ranging from specific changes such as standard billing to broad reforms such as expansion of public insurance.
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