Healthcare’s Biggest Challenge

By Outsourcing Center, Kathleen Goolsby, Senior Writer

Healthcare’s Biggest Challenge

Behind closed doors, discussions about the biggest challenge for both providers and payers in the healthcare industry are not about HIPAA compliance. It’s about how to be profitable. Given the numerous industry problems besetting companies, revenue has been drastically cut, and most have lost millions of dollars for several years in a row. The solution, as many are discovering, is for organizations to become more efficient. And the only way to accomplish that objective is to outsource non-core business processes and take advantage of outsourcers’ expertise and technological resources.

One of those processes – document processing and claims communication – is something that healthcare people “just hate to do,” according to Joseph DiMartini, president and of Advanced Business Fulfillment. But it’s crucial, because that’s how they get paid.

How to flow information quickly is the issue, he points out, but it takes more than just buying machines that run faster. “Faster is not necessarily less costly,” says the CEO. “To be able to run more efficiently, you have to be able to get raw data out of systems and not work from print files.” And that’s not the same thing as buying products that save postage costs and handle in-house mail processing. Nor is it the same thing as hiring a company to come in and run the equipment in your production center or mailroom. Those scenarios “look good on the outside,” he says, but “once you look under the covers, it’s really not that great. You can’t get real cost savings advantages unless you outsource the process to a provider that is transaction-based (rather than product based) and is running the process for multiple companies from one location.”

Healthcare’s Intricacies

Until recently – when they have been driven by cost constraints and regulatory challenges – healthcare organizations tended not to outsource. And many outsourcers have yet to target the healthcare industry. Primarily, the reason for reluctance on both sides is the huge potential liability if mistakes are made or something doesn’t happen on time. ABF’s CEO says, for instance, “There are a lot of printing companies out there that do high-tech printing. But most of them have only one or two healthcare clients. If you are printing bank statements, it doesn’t matter whether somebody receives a statement on the 16th or the 12th. But when you are talking health-related information, that’s different. If somebody receives a statement that you went to the doctor and you have AIDS, it’s just not the same as somebody accidentally getting your car lease payment information. It’s a totally different level.”

The privacy, security, coding and data transmission standards of the Health Insurance Portability and Accountability Act (HIPAA) is only one set of the regulatory issues that control the way providers and payers do business. It’s a big driver for outsourcing, but only those outsourcers that become HIPAA compliant themselves will reap the benefit of new business. DiMartini suspects that one result of HIPAA will be “a lot of new service companies popping up. No single insurance company is going to want to stand up and say it will take full risk for doing all the HIPAA things. They would much rather hook up with ABF or another healthcare outsourcer and not have to worry about transaction sets and HIPAA.”

ABF is HIPAA compliant, its CEO says, as far as electronic transactions go. They encrypt all data. That’s 90 percent of their battle, but over the next 8-10 months, ABF will be doing a “HIPAA reorg” on the security side, implementing iris authentication and taking other necessary measures to become “totally tight, like the Pentagon.”

Just Click and Send

ABF clients don’t need a mailroom, as the outsourcer prepares and ships the mail production of its clients from its facility (more than one billion documents per year). Besides snail mail, payers have the option of Explanations of Benefits (EOB) being distributed to insureds via encrypted email, Internet fax service, or having it posted on a Web site so that the insured can access it through a browser. All the backup information for an EOB can be handled with the same options. So they reap the benefits of streamlined processes, real-time information and all-important increased customer satisfaction. ABF services make the payers more efficient, and the cost is a simple click charge per transaction (the ASP charges no setup or programming fees).

ABF is an Application Service Provider (ASP) that uses the most technologically advanced systems in the healthcare industry. The ASP integrates claims systems and reporting, mail production, forms design and eBusiness solutions. Payments to providers can be handled by electronic funds transfer. Better still – because it costs less – payments can be handled through automated clearinghouse (ACH). As long as a payer provides its account information and the account info for providers, ABF can electronically manage the movement of money from the payer’s account to the providers. Payment processes for multiple clients can be handled all in a single transaction by ACH.

The outsourcer uniquely identifies with its current 202 clients, as its 75 people come from a healthcare background. That’s important to companies like Benefit Planners, a Texas company serving 200,000 insureds. ABF’s high level of service and dedication in serving a payer’s customers was the primary factor in Benefit Planners’ selection of the outsourcer. With rave reviews on customer service and reports of clients savings $100,000, $250,000, and even more per year, it’s understandable that ABF is the largest and fastest-growing outsourcer for healthcare claim document processing.

And its clients are way ahead of the game in solving the profitability issue.

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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