Encore! EP363: How to Cut Healthcare Admin Burden in Half, With David Scheinker, PhD

It costs providers roughly 14% of a transaction's value just to get paid for it, and payers tack on another 5% to 15% just to pay it — putting 20% to 30% of every healthcare transaction into pure administrative waste before anyone talks about redundant care or unnecessary procedures. David Scheinker, PhD, executive director of systems design and collaborative research at Stanford Children's Health, joins Stacey Richter in this encore episode to explain why that waste persists even though everyone agrees it's a problem — and to lay out a genuinely actionable fix: standardizing healthcare contracts the way industries like derivative trading and credit card processing already have.

WHAT YOU'LL LEARN

✅ How much administrative cost is actually baked into a typical healthcare transaction on both the provider side and the payer side, and how that adds up to 20% to 30% of total spend

✅ Why derivative traders cut their per-contract cost from $100,000 to $5,000 by standardizing how they transact — and why healthcare hasn't done the same, despite obvious parallels

✅ What it would mean to standardize healthcare contracts around shared "parameters" — similar to how Airbnb lets every listing negotiate price around a common set of defined variables like bedrooms and bathrooms

✅ Why some organizations actually profit from the current transactional waste, and why legacy technology, sunk costs, and CMS-driven regulatory complexity all work against collaboration

✅ Why Surescripts — created by a group of competing PBMs who needed a shared e-prescribing platform — is proof that healthcare competitors can and do collaborate around a genuinely common pain point

WHY THIS MATTERS

Administrative burden in healthcare isn't an unsolvable mystery; it's a coordination problem that other industries facing similar friction have already solved by standardizing how they transact. The obstacle isn't a lack of a workable solution — it's that some organizations profit from the current mess, legacy systems are expensive to unwind, and regulatory complexity makes collaboration harder than it needs to be. For anyone trying to reduce the real cost of getting paid and paying in healthcare, Dr. Scheinker's research points to a concrete, non-theoretical path forward: standardized contract parameters that leave plenty of room for competitive negotiation while making the underlying transactions dramatically cheaper to execute.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Listen on Apple Podcasts

🎤 Listen on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

00:00 Introduction

10:39 What's the quantitative administrative cost in an average transaction?

11:05 What's the quantitative administrative cost in a healthcare transaction?

11:58 What does the healthcare billing and administration cost add to the US's overall healthcare spend?

12:53 Is it possible to cut billing and administrative costs in healthcare?

14:17 "In some ways, the problem for healthcare should be simpler."

15:30 What does the complexity of the current system look like in a doctor's office?

18:42 How did David go about studying healthcare administrative costs?

21:34 "It doesn't have to be simple; it should be standardized."

24:50 What would be the pushback on standardizing contracts in healthcare?

25:43 Why is it possible to gain more value by losing customization in contracts?

27:20 "Never let a good crisis go to waste."

27:41 "It's much easier in healthcare to build something new than to change something that exists."

30:47 What benefits does telemedicine have to cutting administrative costs?

32:17 What is another significant benefit of using standardized contracts?

33:26 Why haven't standardized contracts become a common thing in the current healthcare system?