SACRAMENTO, CA – Regardless of whether reform legislation passes, the healthcare industry must become more efficient, a healthcare policy expert said this week.

“The current system is rife with inefficiency. The allocation of resources is indefensible,” said Alan Weil, executive director of the Washington, D.C.-based National Academy of State Health Policy. “If you start there, it gives you room to talk about what’s hard – how do we squeeze that out.”

Weil told attendees of a briefing on healthcare coverage in 2010, hosted by the Center for Health Improvement with support from the California HealthCare Foundation, that states should focus on eliminating administrative waste in areas such as paper processes and eligibility and enrollment systems.

According to Weil, the healthcare delivery and insurance systems are also inefficient.

“There is a tremendous opportunity for simplification” if they reduce the burden of paperwork and processes, he said. “If we reduce administrative waste, we liberate a lot of money for services.”

Weil said the core target needs to be in the clinical arena, where clinical waste exists in the form of patients who need care but are not getting it and patients getting care that they don’t need.

“This is the frontier of improving the healthcare system,” he said.

On the national level, the Centers for Medicare & Medicaid Services has established a list of “never events” for which it will not pay. Weil said the next frontier is targeting the “almost-never medical errors.” This, he said,  requires benchmarks, risk and rate adjustment, sharing best practices and creating expectations, data infrastructure and multi-payer participation.

What’s promising in this area, he said, is that Medicare, which is not tailored to individual states, is engaged in patient-centered medical home demonstration projects.

“This is a new opening,” Weil said. “If states lead, the federal government will participate.”

“Efficiency is a great goal,” he said. It’s not easy to do, but he believes it’s worth fighting for.

While driving out inefficiency results in a lost revenue source for someone, it’s a more desirable choice than eliminating services because there’s no money or no will to tax to pay for them, Weil said.