Initiative to Measure EDI Adoption

HDM Breaking News, December 2, 2008

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. It is a national reference for tracking and measuring the transition from paper-based and phone-based transactions to electronic transactions.

Through an extensive search of literature Emdeon employees have estimated the current rate of adoption for electronic medical claims and related transactions.

They estimate 75% of claims are electronically submitted, as are 40% of eligibility and claim status transactions. Only 10% of claim payments are electronic, as are 26% of claim remittance advice transactions. They estimate use of electronic data interchange for these five transactions presently 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 where 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.

To a degree, the initiative seeks to restart and greatly expand the annual research on EDI growth that Health Data Management magazine did in the 1990s through its Health Data Directory. "We're trying to pick up that ball and take it to the next generation," Paramore says.

If successful, the initiative may shed light on the remaining barriers toward 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 also 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. More information is available at ushealthcareindex.com.

For more information on related topics, visit the following channels:

• Business Intelligence
• Electronic Data Interchange
• Policies/Regulation
• Revenue Cycle Management
• Hospitals
• Group Practices
• Payers