- A new study by the American Hospital Association (AHA) found regulatory burden imposed by federal programs including meaningful use costs health systems and post-acute care (PAC) providers nearly $39 billion a year.
Researchers determined the average-sized hospital spends $760,000 annually to comply with meaningful use administrative requirements. Total, hospitals spend an average of $7.6 million to meet all federal regulations — $1,200 per admitted patient.
Furthermore, hospitals devote the equivalent of 59 full-time staff members to administrative tasks related to federal regulations. More than one-quarter of these staff members are healthcare providers who would otherwise be caring for patients.
“There is growing frustration for those on the front lines providing care in a system that often forces them to spend more time pushing paper rather than treating patients,” said AHA President and CEO Rick Pollack in a public statement.
“Too often, these regulatory requirements seem detached from good and efficient patient care,” he continued. “The regulatory burden is substantial and unsustainable, and reducing the administrative complexity of health care would allow providers to spend more time on patients, not paperwork.”
The report assessed the administrative impact of existing federal requirements from CMS, OIG, OCR, and ONC on health systems, hospitals, and PAC providers.
Researchers measured administrative burden relating to quality reporting, value-based payment models, meaningful use of EHRs, hospital conditions of participation, program integrity, and other domains of regulation.
AHA developed a survey about nine domains of federal regulations and issued it to a subset of AHA members. A total of 190 individual hospitals participated in the study. Forty-one percent of respondents were hospitals with fifty or fewer beds, 29 had 50-99 beds, and 120 had 100 or more. Eighty-seven percent of participating hospitals were part of a health system and 13 percent were independent acute-care hospitals.
“A primary goal of the survey was to quantify the full-time equivalent (FTE) and dollar impact of the administrative responsibilities associated with compliance with federal regulations,” noted researchers.
Survey respondents were asked to estimate the number of FTEs and dollars spent on health IT companies and consultants as well as IT and other resources dedicated to meeting administrative requirements. These estimates excluded time and resources dedicated to the clinical component of each regulation and compliance with any similar state or accreditation requirements.
Complying with Meaningful Use requirements
Administrative burden and spending related to meaningful use requirements in particular have come in the form of IT investments. The majority of hospital spending dedicated to meaningful use went toward health IT system upgrades.
“[Hospitals] invested $411,000 in related upgrades to systems during the year, over 2.9 times larger than the information technology (IT) investments made for any other domain,” wrote authors in the report. “Regulatory compliance has required extensive investment in health IT systems and process redesign.”
Estimated costs allotted toward meeting meaningful use requirements did not account for the time spent entering patient data into EHRs or the labor costs associated with hiring IT professionals to implement and run core EHR systems.
Timelines for providers to achieve meaningful use varied widely across surveyed providers. The timeline for hospitals was fast-paced, while the timeline for physicians was more relaxed. Furthermore, PAC providers were entirely exempt from meaningful use requirements. These variations in meaningful use adherence led to inefficiencies during health data exchange.
“Therefore, many health systems and hospitals had the capability to transmit electronic information as required under MU, but could not transmit the information to their referral partners,” wrote researchers. “As a consequence of this inefficiency, as well as others, interviewees felt that administrative challenges associated with MU compliance far exceeded any improvement to a patient’s quality of care as a result of these activities.”
Adjusting to frequent regulatory changes
Another source of administrative burden is the timing, pace, and frequency with which regulations change.
“Regardless of the type of regulation or domain, a significant investment of staff time and resources is required in order to make the necessary changes to comply,” researchers stated.
Many federal agencies augment this stress by issuing and implementing changes within very short timeframes.
“One example highlighted by the interviewees was the 2017 Medicare physician fee schedule final rule. It was released by CMS in November 2016 and required hospitals to be compliant by Jan. 1, 2017,” researchers noted.
According to the report, these changes had a significant administrative impact on health IT systems, hospital staff training, and operational modifications. Modifications often require providers to reprioritize and reorganize their daily operations and can potentially detract from the amount of time and energy devoted to patient care delivery.
“As new or updated regulations are issued, a provider must quickly mobilize staff — not only those who are already dedicated to quality reporting, legal and compliance functions, who may be committed to maintaining compliance or other important functions, but also care delivery staff, who are shifted away from their patient care responsibilities,” maintained researchers.
Regulatory changes often entail a barrage of meetings as well as the redesign, testing, and implementation of new processes throughout healthcare organizations.
EHR implementation processes can also be disrupted by regulatory changes. Already complex EHR implementations can become further complicated by the need for additional modifications.
“Coming into compliance with new or updated regulations also generally involves changing the provider’s EHR to modify how information is documented, collected and reported,” wrote researchers. “These IT changes are costly and their design, testing and implementation requires lead time, particularly when they involve a vendor.”
EHR implementation timelines often do not include the time required to make adjustments necessary for changing regulations. Providers also must develop ways to meet regulations while also working to implement a permanent solution to meet the needs of clinical care and hospital operations.
Eliminating Stage 3 Meaningful Use
In response to needless administrative challenges, AHA recommended CMS eliminate Stage 3 Meaningful Use.
In June, AHA submitted a letter to CMS requested administrative complexity be immediately reduced to save healthcare providers billions in annual costs. The letter contained 29 recommendations to reduce regulatory burden – including a recommendation to immediately cancel Stage 3 Meaningful Use.
“These excessive requirements are set to become even more onerous when Stage 3 begins in 2018,” wrote AHA. “They also will raise costs by forcing hospitals to spend large sums upgrading their EHRs solely for the purpose of meeting regulatory requirements.”
AHA suggested CMS instead set forth a 90-day reporting period in the future years of the meaningful use program. The association also recommended CMS gain insight from stakeholders about how to further reduce the administrative burden of the program.