Paper, People, & Universal Healthcare

Question:  How many people do health insurance carriers employ to manually enter data received on faxes into eligibility and claims systems?

My background is all technology.  All of my previous companies built industry agnostic middleware solutions which we sold to hardcore IT teams.  So the last two years have been a crash course for me in learning the SOPs of our customer base — insurance carriers, TPAs, and HR departments.  My learning curve of the week is related to how our system should best produce automatic eligibility notifications to insurance carriers when COBRA and retiree continuants elect continuation coverage, change plans, change dependents, terminate coverage, etc.  How the system should “best” do this is probably a misnomer, at least for now.

The “best” solution for all parties would clearly be EDI(electronic data interchange).  In other words, our COBRApoint system should automatically electronically send a file of information to a carrier, and they should have a system which automatically takes this information and updates their eligibility systems — no people and no paper.  Ideally, all carriers would accept the same file format, and all carriers would accept these electronic files for all of their clients (employers sponsoring group health plans).  Unfortunately, this isn’t the case.

If you poll our customer base about this topic, your head will start to spin.  “Carrier A wants us to manually enter these changes through their website.  Carrier B only accepts faxes.  Carrier C wants us to send changes via (hopefully encrypted) email.  Carrier D will accept EDI files, but only for our three largest clients — oh, and since one of these clients is a 5,000 to 10,000 member group and the other two are 10,000 plus, the files have to be in a different format and sent to different places.”  “O.K.,” I say, “is there one format that all carriers will accept for all clients?”  “Sure,” they say, “faxes.”  At this point I can’t help but imagine some little fax machine at Mega Insurance Company running 24 hours a day spewing out pieces of paper.  Now, I’m sure this isn’t the case, they probably have a Big Blue document management system collecting all these faxes and routing them to people, but still, how many people must it take to manually enter all this data, and how much do all these people cost, and how many manual mistakes do they make????

If you’ve paid any attention to the news surrounding the still far off 2008 US Presidential Election, you’ve no doubt seen that some flavor of healthcare reform or Universal Healthcare is a very popular topic.  In the interest of full disclosure I suppose I should admit that I have a deep-seated mistrust for any idea which suggests that we should build a government program/department to better manage something than private industry is doing.  If you don’t agree with me, just go spend an afternoon in your local DMV office.  That being said, I recently spent a delightful evening reading the position papers of all of the major candidates on this very topic at the request of one of our potential investors — and I found something I could relate to.  Most of them claim that their first order of priority would be improving the efficiency of Healthcare IT — including and perhaps most importantly how providers, members, employers, and carriers communicate.  Amen.

I would like to point out that the healthcare community, including the insurance carriers, are already working on this, and the government is involved too.  HIPAA specifically makes an attempt to encourage simplifying all of this communication.  WEDI, the Workgroup for Electronic Data Interchange (with the active participation of carriers and providers) has been working on this for years.  Their core purpose, “Improve the quality of healthcare through effective and efficient information exchange and management,” is spot on.  This page I think nicely sums up the “best” solution I’m dreaming of.  In the meantime, we’re generating lots of faxes.