Obamacare saves 0.023%

Daily Mail ^ | April 10, 2012 | Don Surber

[upchuck]

One thing about unconstitutional laws is that they invariably fail to do what they set out to do. Homicides rose after D.C. passed its unconstitutional gun law in 1976 — and fell to their lowest level in 43 years after the Supreme Court repealed the law. And so it goes with Obamacare, which will drive health insurance prices up as it mandates near universal coverage. That is good for insurance executives like Warren Buffett, but bad for consumers. Nonetheless Kathleen Sebelius, head of DHHS, is touting all the savings Obamacare will bring — $460 million a year from a $2 trillion a year health industry.

That’s 0.023% — 23 one-thousandths of 1%.

Pardon my laughter.

As you read the press release, remember $4.6 billion over 10 years is just $460 million a year. Given the history of blue-skying savings, odds are this will increase costs, but even accepting The Man’s numbers, it is a pitifully small saving.

From the press release:

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius today announced a proposed rule that would establish a unique health plan identifier under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The proposed rule would implement several administrative simplification provisions of the Affordable Care Act.

The proposed changes would save health care providers and health plans up to $4.6 billion over the next ten years, according to estimates released by the HHS today. The estimates were included in a proposed rule that cuts red tape and simplifies administrative processes for doctors, hospitals and health insurance plans.

“The new health care law is cutting red tape, making our health care system more efficient and saving money,” Secretary Sebelius said. “These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients.”

Currently, when health plans and entities like third party administrators bill providers, they are identified using a wide range of different identifiers that do not have a standard length or format. As a result, health care providers run into a number of time-consuming problems, such as misrouting of transactions, rejection of transactions due to insurance identification errors, and difficulty determining patient eligibility.

The rule simplifies the administrative process for providers by proposing that health plans have a unique identifier of a standard length and format to facilitate routine use in computer systems. This will allow provider offices to automate and simplify their processes, particularly when processing bills and other transactions.

The proposed rule also delays required compliance by one year– from Oct. 1, 2013, to Oct. 1, 2014– for new codes used to classify diseases and health problems. These codes, known as the International Classification of Diseases, 10th Edition diagnosis and procedure codes, or ICD-10, will include new procedures and diagnoses and improve the quality of information available for quality improvement and payment purposes.

Many provider groups have expressed serious concerns about their ability to meet the Oct. 1, 2013, compliance date. The proposed change in the compliance date for ICD-10 would give providers and other covered entities more time to prepare and fully test their systems to ensure a smooth and coordinated transition to these new code sets.

The proposed rule announced today is the third in a series of administrative simplification rules in the new health care law. HHS released the first in July of 2011 and the second in January of 2012, and plans to announce more in the coming months.

Meanwhile, I need a new doctor. He is dropping his practice due in part to Obamacare.

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They have been counting the same simplification savings since the Clinton administration. I give them credit, they use some ingenuity in making up new numbers each time, but it is the same idea. Maybe we should suggest that feds save on postage by using email; the savings will be just as “real” and they can say it saves a gazillion bazillion dollars.