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The Convergence of Healthcare and Financial Services

Outsourcing’s Role in Facilitating Change that Disrupts Business as Usual in the form of Integrated Solutions

Consumer-directed healthcare is driving a convergence of technologies and business processes in the healthcare and financial services industries. Exante Financial Services, a division of UnitedHealth Group, is an organization on the cusp of this new era of change. Exante provides healthcare account administration, including Flexible Spending Accounts, Healthcare Reimbursement Arrangements, Retirement Reimbursement Accounts, and Healthcare Spending Accounts, and handles the debit card and member ID card needs for more than 20 million consumers who are members of UnitedHealthcare medical plans This year, Exante will introduce innovative integrated solutions for members: an integrated healthcare and financial services access card.

The integrated card consolidates members’ medical ID cards and tax advantage account debit cards (such as health savings accounts [HSA], flexible spending accounts [FSA], and health reimbursement arrangements [HRA]) into a single card. The innovation allows Exante to market a more integrated and simplified solution to its clients and a better experience for consumers.

Exante began working with Personix. Personix provides manufacturing and fulfillment for Exante’s medical ID and financial debit cards and is partnering with Exante to manufacture the integrated cards. “We looked for a partner who was strategically aligned with the direction we were going,” says Chip Walters, Vice President New Products, Exante Financial Services. “We wanted a partner who could us help achieve simplicity and affordability, as well as quick time to market. But we were also looking for new technologies that would enable us to drive goals for new capabilities in supporting our members.”

The initial manufacturing run of Exante’s integrated cards is just around the corner, and Walters says consumers are anxiously awaiting it. “The employers that offer our healthcare products to their employees in open enrollment are excited about the integrated card, too,” he adds. “It supports their goals related to consumer engagement and consumer-directed health, while making it possible to navigate all of the consumer touchpoints with one card.”

Well Positioned for Print Convergence

Personix, headquartered in Houston, Texas, is a subsidiary of Fiserv, a Fortune 500 company that provides information-management services and technology for financial institutions and for healthcare transactions. Personix focuses on enabling customer communications for its clients through print and mailing services out of 10 facilities strategically placed across the United States. It produces traditional ID cards for many of the largest managed-care organizations in the country as well as Visa and MasterCard credit and debit cards for 6,000 financial institutions.

While Personix handles card manufacturing and fulfillment for Exante, Hal Cline, Vice President Card Sales at Personix, points out that the company is also uniquely capable of merging data for the new trend of integrated cards. “It’s an area where we add a lot of value,” states Cline.

Personix receives a file from a secure managed-care organization with all the information about people enrolled in the medical plan who need ID cards. It flags the people who also need, for instance, an HSA card. Personix can deal with the financial side of the equation by cross referencing a Visa/MasterCard (or Amex or Discover) card number with the payer’s health plan ID number, merges the data into one card, and can then inform the payer of the member’s Visa/MasterCard number.

“As a part of Fiserv, the largest data processor for US banks, we are well positioned to be an integrator,” says Cline.

Driving Change

The primary impetus for developing the integrated cards is the introduction and Bush Administration’s heavy endorsement of High Deductible Health Plans (HDHPs) designed to lower overall healthcare expenses through HDHP consumers’ wiser out-of-pocket spending.

From the consumer perspective, HDHPs add another card to carry besides an ID card and HSA, FSA, or other spending card.

From a physician or healthcare provider’s perspective, an HDHP means the provider needs to collect payment from the consumer for the cost of services up to the high deductible (usually $1,000 or $2,000) that the consumer must pay before the payer reimburses the provider. With an integrated card that carries multiple financial accounts, the consumer merely swipes the card in the healthcare provider’s office. The card pulls available funds from the HSA, FSA or even the Visa or MasterCard credit account and then deposits funds into the provider’s account.

From a payer’s perspective, the integrated card reduces costs in separately producing and mailing multiple cards to the consumer.

The big-picture view is one of health insurance companies and banks competing for the consumer’s dollars. “With the convergence of medical banking with financial institutions, the account is fundamentally the same. So a consumer can now choose to bank with a bank (and have two cards) or with a health insurance company that has created its own bank,” explains Cline.

Integrated Solutions, Not Just Integrated Cards

Payers are also driving other change in the healthcare industry. Two areas of change impact printed and mailed documents, and Personix has adapted its electronic capabilities and offerings to provide integrated solutions for its clients. Exante Financial Services provides this capability for UnitedHealth Group and other payers in the market.

Personix historically has for years printed and mailed critical financial documents for its clients–400 million mail sets per year–such as healthcare EOBs (Explanation of Benefits) and EOPs (Explanation of Payment) and credit card statements. Dan O’Grady, Senior Sales Executive of the Mail, Checks, and Statements Division of Personix, says “change is occurring in this area because the push is on to electronically deliver as many of these documents as possible.”

As organizations increasingly adopt electronic delivery, it impacts the cost-effectiveness of insurers’ and financial institutions’ ability to print and mail these documents in house, which drives them to outsource the process. O’Grady says another driver for outsourcing is the inability of insurers and financial institutions to justify the expense of upgrading their legacy systems for HIPAA compliance to ensure the right piece goes to the right person every time.

In addition, insurers and financial institutions want to make the documents more effective communication vehicles for generating revenue and reducing customer-service calls. “That requires the ability to dynamically change the look and feel of the document, and they can’t do that with legacy systems,” says O’Grady. Again outsourcing solves the challenge.

The other area of change is the process of mailing a check and a paper remittance advice to a healthcare provider. According to Jarvis Shockey, Healthcare Banking Market Manager at Personix, it costs a payer between 45-50 cents just for the paper, printing, and mailing. That cost does not include the behind-the-scenes support costs for lost checks, stop payment, re-issuing checks, bad addresses, returned mail, etc.

Through Personix’s Electronic Funds Transfer (EFT) and Electronic Remittance Advice (ERA) solutions, insurers and banks move away from paper transactions and achieve lower costs.

But the issue is not so simple for healthcare providers. Shockey explains that while they can get payments faster through EFT, “many providers’ practice management systems and billing systems are unable to ingest electronic remittance advice, reconcile against billed items, and handle exceptions.”

As a result, some providers opt for electronic payments and transactions, some want both on paper, and others want a combination of electronic payments and paper remittance advice. These provider preferences are driving more outsourcing.

Most payers have large legacy systems geared toward paper payments and transactions. “If they were to just flip a switch to turn all transactions to electronic, it would work well,” says Shockey. “But their systems and process are not geared to managing the various combinations of paper and electronic preferences of the providers. So they look to someone like Personix. We can manage and split out the electronic and paper transactions for them.”

Personix also has a national provider database where healthcare providers can register their banking and EDI transactional information once. This is another key reason why payers are outsourcing says Shockey. “A healthcare provider may deal with 10, 50, or even more than 100 different insurance companies. They don’t want to have to go to 100 different Web sites and enter their banking and EDI information 100 times. Let’s say a provider registers its information for a payer in Minnesota who is our client. The provider doesn’t have to register again for a payer in Iowa who is also our client; it happens automatically.”

Security and authentication issues are another driver for increased outsourcing in this area. “Many payer systems aren’t geared to securely manage providers’ banking information or to verify it,” says Shockey. “How does the payer know who the person signing up really is? Is there someone in the office who has hijacked the doctor’s system to funnel payments somewhere else? Verifying and securing banking information is not a core competency of payers. So they look to someone like Personix to manage the process of enrolling the provider and verifying, authenticating, and managing that banking information.”

Consumers figure in this picture, too. With the increased adoption of consumer-directed health plans, payers will be making more payments directly to health plan members. An EFT solution will provide consumers with the same payment benefits as healthcare providers, but also create the same challenges for the payers.


Shockey predicts that payment processing will become more complex as payers pay providers and members from multiple accounts (HSA, FSA, HRA, and traditional health plans) and that payment integration/consolidation and EFT/ERA solutions will be key to managing complex medical plans.

Cline predicts that payment consolidation and integrated cards will motivate employers to begin looking at which payer’s plan is more integrated rather than which is less expensive.

The convergence of healthcare services and financial services in print and mail processes puts the healthcare industry in the midst of a critical transition period, according to Shockey. Outsourcing is a proven strategy for mitigating the risks associated with change and new technologies that disrupt business processes. Outsourcing service providers such as Personix are ahead of the curve in developing innovative solutions and offerings to help the healthcare industry successfully transition through change.

Lessons from Outsourcing Journal:

  • Consumer-directed healthcare is driving a convergence of technologies and business processes in the healthcare and financial services industries, which impacts all print processes for healthcare communications among payers, providers, and consumers.
  • One change is integrated medical ID cards and bank account cards. Outsourcing service providers that have expertise in integrating disparate data will be the strong players.
  • Healthcare payers are outsourcing print/mail processes for three primary reasons: to be more cost-effective as the industry increasingly adopts digital communications, to avoid the expense of upgrading their legacy systems for HIPAA compliance, and because their legacy systems cannot dynamically change the look and feel of communication documents.
  • Although healthcare payers are moving away from paper transactions to achieve lower costs for transferring payment and communicating remittance information, many healthcare providers want a combination of paper checks and digital remittance information. Payers are outsourcing the processes because their systems are not geared to managing the combination of paper and digital transactions.
  • Many payers are outsourcing the process of enrolling, verifying, authenticating, and managing the healthcare providers’ banking information to outsourcing providers with expertise in security.


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