Emdeon Leads Effort to Measure EDI Adoption

Howard Anderson, Executive Editor, and Joseph Goedert, News Editor
Health Data Management Magazine, February 1, 2009

Emdeon Business Services is spearheading early efforts to measure the progress of the health care industry in adopting electronic financial and administrative transactions.

The Nashville, Tenn.-based vendor of claims clearinghouse services and revenue cycle management software has unveiled the U.S. Healthcare Efficiency Index.

The national reference tracks and measures the transition from paper-based and phone-based transactions to electronic transactions.

Following an extensive search of published studies, Emdeon has estimated the current rate of adoption for electronic medical claims and related transactions. For example, 75% of claims are electronically submitted, as are 40% of eligibility and claim status transactions, the company's research shows.

Only 10% of claim payments are electronic, as are 26% of claim remittance advice transactions. Emdeon estimates use of electronic data interchange for these five transactions saves $23.6 billion annually. But $53.3 billion could be saved each year if all of these transactions were electronic.

"We realize these numbers are imperfect, but they are what we could find that was publicly available and we worked for six months," says Miriam Paramore, senior vice president of corporate strategy at Emdeon and coordinator of the initiative.

Now, the effort moves to a second phase in which industry stakeholders, starting in the first quarter of 2009, will be asked to report their use of electronic transactions. Hospitals, physicians, billing companies, insurers, clearinghouses and other transactions processors are among the segments that will be asked to submit their electronic transaction statistics.

Shed Light

If successful, the initiative may shed light on the remaining barriers to reaching the efficiencies expected by using standards-based EDI when the HIPAA administrative simplification provisions were enacted 12 years ago.

All data will be treated with confidentiality and reported in the aggregate. "We want actual numbers from the industry," Paramore says. "We hope the industry will self-report."

Initiative proponents expect eventually to expand the data collection to cover additional transactions, such as pre-authorizations, pre-certifications and referrals. They hope to expand beyond medical transactions to cover dental, vision and Workers' Compensation. The group also wants to break down data by payer type, provider type, transaction type and other categories.

Emdeon has established an independent advisory council to oversee the U.S. Healthcare Efficiency Index initiative. Along with Paramore, charter members of the advisory council include statisticians Fritz Scheuren and Patrick Baier at Scheuren-Ruffner Consultants; auditors John Phelan and Andrew Naugle at Milliman Inc.; health care economist Jane Sarasohn-Kahn at the consulting firm THINK-Health; Dave Garets, CEO of HIMSS Analytics; and Newt Gingrich, former U.S. House Speaker and founder of the Center for Health Transformation.

Additional advisory council members are being sought to represent public policy, office-based providers, institution-based providers, commercial payers, government payers and Blue Cross Blue Shield plans.

Emdeon has provided initial funding and the Web site infrastructure. It invites other companies to support the initiative.

Worthwhile Effort

Emdeon's efforts are laudable because they could call attention to the capacity of existing financial networks to take on additional clinical transactions, says Pat Kennedy, president of PJ Consulting. The Rockville, Md.-based firm primarily advises payers.

"We have a tremendous electronic highway that's already been built by the clearinghouses," Kennedy says. "We can add 10 times more traffic to that highway. We don't need to spend more money on infrastructure."

Payers and clearinghouses alike want to push the federal government to use existing financial networks rather than creating new networks, such as the National Health Information Network, to handle clinical transactions, Kennedy contends.

The consultant argues that Emdeon's automation estimates are conservative. He estimates, for example, that 87% of claims are electronically submitted. And although competing clearinghouses may prove reluctant to provide Emdeon with data, Kennedy is confident that payers will provide adequate information for the efficiency index.

More information on the initiative, including the public studies used to estimate existing EDI use, is available at www.ushealthcareindex.com.

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