Capturing the benefits of web-based connectivity: provider-payer relationships are improving, thanks to third-party web-based solutions

Healthcare Financial Management, Dec, 2005 by James R. Gordon

Administrative waste, caused partly by a backlog of paper, phone, and fax transactions in healthcare organizations, is costing the healthcare industry up to $100 billion per year, according to a March report, America's Hidden Healthcare Crisis, by HSS, Inc. Implementing web-based connectivity is one way in which healthcare payers and providers are addressing this problem. Web-based connectivity solutions, which link payers with their affiliated providers via the web and allow them to execute administrative transactions automatically in real time, are streamlining healthcare processes across the nation.

The benefits of web-based connectivity are the same for payers and providers alike: time and money saved by moving administrative transactions to the web. However, the motivations for and manifestations of these benefits are different for each.

For providers, having web-based connectivity with payers means that nearly all their standard inquiries can be answered online, enabling their staff to spend less time on the phone and more time on other priorities, such as patient care. Real-time web-based connectivity also gives practices more control over administrative activities by providing accurate, up-to-date information on claims status and payment. This means providers can garner revenue from outstanding claims that have either been denied or not paid in full--funds that, under other circumstances, staff members would not have had time to track down.

For payers, the benefits are similar. With web-based connectivity, health plans save money by taking fewer calls from providers, pushing less paper, and offering a web-based template that maximizes the accuracy of submitted inquiries. It also has the added benefit of improved provider satisfaction. By automating the time-consuming processes that frustrate providers day to day, health plans are able to reap the rewards of stronger provider relationships. Providers report that web communications solutions have increased their satisfaction levels with health plans and that it is easier to do business with plans that offer such solutions.

Many tools are available that have been designed to alleviate the strain of repeated processing of administrative transactions such as eligibility verification, referrals, and checking claim status. However, not all types of tools are created equal. Some may not be perceived as valuable, others may have low adoption rates or limited functionality, and, for technologies that are not web enabled, the costs to support certain applications are high. By taking advantage of web-based offerings, providers can clear the backlog of paperwork that accumulates and essentially eliminate telephone interaction with health plans while meeting the needs of patients.

Also, by leveraging a payer-neutral platform, payers can enable providers to interact with multiple health plans via a single point of access, with one username and password. This approach can maximize the number of transactions processed and facilitate provider participation. The benefits are numerous: Both payers and providers can speed transactions, process claims electronically, capture time and cost savings, heighten productivity, and improve patient and provider satisfaction. But with so many healthcare technology options available, how does a health plan make the best decision for itself and its providers?

To Buy or to Build? That IS the Question! The "buy or build" question is one of the most difficult decisions health plans face when seeking to implement a web-based solution. Although in-house customized offerings can seem appealing, the reality of designing, building, implementing, and maintaining this kind of technology platform can sap the time, finances, and employee resources of health plans. To choose the best technology, it is necessary to invest time and internal effort to first clarify exactly what is needed and how the solution should work.

Measure effectiveness of existing processes. The first step in developing a web-based solution is to measure the effectiveness of existing processes and determine where the bottlenecks are, making it easy to identify which processes can be streamlined. Identifying where the system breaks down and how that affects the bottom line is crucial to finding a solution that truly meets an organization's needs.

Map out goals. After taking a close look at the system's inefficiencies, it is necessary to map out goals for the technology. What processes need to be fixed? What results are expected after making these changes? These questions should lead a health plan to define basic objectives, such as:

* Providing a tool that fits into the provider workflow

* Ensuring that the solution will gain rapid adoption and maintain high usage levels

* Minimizing the cost for providers by providing an Internet-based product

* Executing transactions compliant with the Health Insurance Portability and Accountability Act

Once these various objectives are determined, the payer can then assess the pros and cons of outsourcing the creation of a web-based connectivity platform and evaluate how the platform can best generate the desired ROI.