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Obama Administration Proposes $1 Billion in Red Tape Savings Obama Administration Proposes $1 Billion in Red Tape Savings

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Obama Administration Proposes $1 Billion in Red Tape Savings


Kathleen Sebelius, secretary of Health and Human Services, proposes cutting red tape will save hospitals $1 billion a year.(PHOTO: CAROLYN KASTER/AP)

Cutting unnecessary red tape such as fire regulations at dialysis centers and allowing ambulatory surgery centers to perform operations on the same day patients are admitted could save hospitals, clinics and other facilities more than $1 billion in the first year, Obama administration officials said on Tuesday.

The Health and Human Services Department published three rules on Tuesday proposing doing away with a wide variety of rules affecting health care organizations that it said were wasteful and expensive.


Much of the savings comes from freeing up highly paid specialists, such as registered nurses, from doing time-consuming paperwork.

“Our new proposals eliminate unnecessary and obsolete standards and free up resources so hospitals and doctors can focus on treating patients," HHS Secretary Kathleen Sebelius said.

HHS officials declined to give any specifics of how the changes would save money. But the rules themselves are full of complicated calculations. Here's one, involving ambulatory surgical centers, which are smaller facilities that do quick procedures that do no usually require an overnight hospital stay, such as knee surgery:


HHS estimates there were about 7 million ambulatory surgery center admission in 2009, many of which were multiple visits by the same patient because of a rule that requires same-day surgery only if it's an emergency.  "We estimate that approximately one in five (which would ordinarily require two medical visits. one on each of two separate days) would be reduced to one visit by allowing ASCs to perform surgical procedures on the same day a patient is referred to the ASC. As aresult, about 1,400,000 visits can be avoided," the rule reads.

"We estimate that the average visit to an ASC requires two and one half hours of patient time (30 minutes to get to the ASC, a 30 minute wait to be seen, 60 minutes for the visit, and 30 minutes to return home). We value patient time at $10 an hour. We therefore project a savings in patient time of about $35 million a year from 1,400,000 trips avoided because of ASCs performing procedures on the same day patients are referred to the ASC."

The Ambulatory Surgery Center Association had lobbied hard for this rule change.  “Elimination of the prior-day notification requirement in ASCs has been a top priority for ASCA this year,” ASCA executive director William Prentice said in a statement. “Not only does the new rule promote patient choice and access to care, it also reduces costs to Medicare and its beneficiaries.”

Another change would allow smaller hospitals to outsource some lab testing and radiology duties, while yet another would allow groups of hospitals to share governing bodies. "One of of the main impacts on personnel is a chance to reallocate energy to patient care," Centers for Medicare and Medicaid Services Administrator Dr. Donald Berwick told reporters.

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