EP363: How to Cut the Healthcare Administrative Burden in Half, With David Scheinker, PhD

The Case for Standardizing Healthcare Contracts to Cut Admin Costs, With David Scheinker, PhD. One Standard Contract Template Could Cut Healthcare's Administrative Burden in Half. Episode 363.

Stacey Richter talks with David Scheinker, PhD, of Stanford's Lucile Packard Children's Hospital and lead author of a paper on healthcare administrative costs, about why standardizing the parameters used in every payer-provider contract—not simplifying them—is the biggest lever for cutting billing and administrative waste.

WHAT YOU'LL LEARN

✅ Why administrative costs should be quantified transaction by transaction: what it costs to send a bill, file an appeal, or process a denial

✅ Why the paper's headline recommendation is standardization, not simplification—every payer and provider using one contract template built from shared parameters

✅ How an Airbnb-style parameter model (number of bedrooms, bathrooms, amenities) could apply to healthcare contracts, letting negotiation happen on price per parameter instead of on the contract structure itself

✅ Why standardized parameters make it possible to build automation and analytics without writing algorithms full of exponential variables

✅ Why labor-cost pressure on health systems makes automating administrative functions more urgent than in the past, when staffing shortfalls were solved by throwing more people at the problem

✅ What pushback Scheinker expects to standardizing contracts, and why he argues the value gained outweighs the customization lost

WHY THIS MATTERS

Administrative costs in US healthcare are frequently blamed for driving up total spend, but Scheinker's research reframes the fix: it's not about doing away with complexity but about making it consistent, so technology can actually automate what today requires armies of billing staff and mailed paperwork. For plan sponsors and providers alike, standardized contract parameters are a concrete lever for reducing waste that doesn't require waiting on payment reform.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

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00:00 Introduction.

07:23 What's the quantitative administrative cost in an average transaction?

07:49 What's the quantitative administrative cost in a healthcare transaction?

08:43 What does the healthcare billing and administration cost add to the US's overall healthcare spend?

09:38 Is it possible to cut billing and administrative costs in healthcare?

11:01 "In some ways, the problem for healthcare should be simpler."

12:14 What does the complexity of the current system look like in a doctor's office?

15:26 How did David go about studying healthcare administrative costs?

18:17 "It doesn't have to be simple; it should be standardized."

21:41 What would be the pushback on standardizing contracts in healthcare?

22:35 Why is it possible to gain more value by losing customization in contracts?

24:11 "Never let a good crisis go to waste."

24:33 "It's much easier in healthcare to build something new than to change something that exists."

27:39 What benefits does telemedicine have to cutting administrative costs?

29:09 What is another significant benefit of using standardized contracts?

30:17 Why haven't standardized contracts become a common thing in the current healthcare system?