Why do we need identifiers?

For many years, the healthcare industry has explored many approaches to slowing down the ever expanding rise in healthcare costs. As D'Arcy Guerin Gue, Phoenix Health Systems, has indicated, "Strategies have included group insurance plans, subsidized plans, managed care, self-insured funds, wellness programs, and preventative patient education. HCFA introduced Medicare rules limiting allowable charges and requiring standardized transaction processes. Traditional health plans followed suit, introducing cost-saving electronic billing, claims processing, and other business interactions that relied upon computerized coding to identify transactions and parties to the transactions.Unfortunately, few efforts were made to standardize the elements of what has become an industry-wide movement towards healthcare transactions automation." http://www.hipaadvisory.com/regs/natlident.htm

Therefore, creating identifiers for the various HIPAA transactions will further standardize and ultimately decrease healthcare costs.