The cost of monitoring medical care in Pennsylvania.

We estimated the cost of the Health Care Cost Containment Act in Pennsylvania to be over $19 million; the yearly direct cost of KePRO activities to be over $14 million; and compliance costs for peer review to possibly be as large as $27 million, based on our high estimate. We also found that medical records, utilization review and administrative departments in Pennsylvania hospitals have collective annual budgetary expenditures of close to $2.4 billion. In addition, we estimated Pennsylvania physicians to spend from $14 million to $17 million each year on administrative and fiscal activities related to reimbursement. Our cost estimates for non-clinical expenditures were based on the best data available at the time, though in many cases this data was crude. However, we believe that this data is a useful starting place for a dialogue about the cost and effectiveness of these programs. In reporting the cost of these activities it was not our intent to judge the value of any individual program. Instead we hope that we have taken a first step in the process of collecting cost data so that actual costs for non-clinical activities can be appropriately evaluated. Future studies of non-clinical expenditures should not only include direct program expenditures but also the economic impact on providers in complying with the mandates. Finally, efforts to reduce duplicate and unproductive regulatory programs will be necessary in working toward a cost-efficient system. Legislative efforts, such as the Physician Regulatory Relief and Improvement Act (H.R. 4475 and S.B 2051), aimed at the so called "hassle factor" will be helpful.