July 2002
Subject: Kennedy Legislation Pending

Sen. Ted Kennedy, D-MA, previewed at the National Press Club today, health care legislation he plans to introduce.  Of interest to WEDI, the Efficiency in Health Care Act, or eHealth Care:

"At the same time we provide funding to meet pressing immediate needs, we can achieve huge savings by bringing the health care system into the information age.  Processing a single transaction in health care can cost as much as 25 dollars. Banks and brokerages have cut their costs to less than a penny per transaction by using modern information technology. Administrative costs account for almost a third of total health care spending. That's more than 400 billion dollars a year. Reducing administrative costs to the level of other industries would save enough to finance universal health care several times over.

Recent breakthroughs can enable Internet-based methods of bill-processing to cut costs dramatically. We should ask every health provider and health insurer to move toward the most modern, low-cost information technology available.  Today, I am introducing the Efficiency in Health Care Act, or eHealth Care, to cut administrative costs. This legislation will create stringent standards for financial transactions, such as billing and claims processing, that can only be met by adoption of the same kind of high volume, speedy, cost-efficient technology that has dramatically lowered administrative costs in other industries.

The new standards will be coupled with grants to health care providers to assist them in upgrading their information technologies to meet these new demands. It is time to stop running a 21st century health care system with outdated administrative technology."