Commentary: Beyond the Exchanges

The opening of health exchanges last year focused on providing patients with greater access to care. But it failed to address the issue of high cost and the inconsistency of quality across different regions.

Now we need to find ways to provide more affordable and efficient care while obtaining healthier outcomes. These goals mean ridding the system of unnecessary waste by measuring patient care based on outcomes rather than on the number of procedures. We are in the early stages of realizing the full potential of health data digitization, but we need better ways to address data in three phases:

Collection: the digitization and storage of health information

Sharing: ensuring health care providers and insurers have an efficient means of exchanging health information

Analytics: the ability to leverage trends and patterns from health information to make more informed decisions in care

Data collection has offered some success through the implementation of electronic health records, enabling greater access to health information. Data sharing has begun to show some benefits via health information management technologies, which improve the exchange of data among health care providers and insurers. But those two phases have not led to lower costs or improved health care. And we have not yet been able to provide meaningful analytics.

According to the analysis firm Technology Business Research, the health care industry will spend a staggering $34.5 billion on information technology this year. But that spending seems far more reasonable when you think about what is at stake. Health care providers, insurers and public sector agencies are all under intense pressure to meet the wide variety of regulatory mandates. And they are under pressure to chisel away at the $750 billion in health care waste generated annually, according to the congressionally chartered Institute of Medicine.

Through careful analysis, my company has determined that an average size insurer could save more than $160 million annually by using technologies that eliminate antiquated paper-based processes in favor of automated, electronic transactions much the same way online banking transactions are replacing paper checks. Moving to such a system would increase efficiencies, maximize revenue and reduce administrative costs. Imagine the impact we could make were we to include all the insurers in Washington state, let alone the United States.

We recently saw the value in such technologies when working with a Medicaid managed care program that provides health coverage for 1.2 million people. The program recognized its model for managing claims was unsustainable. The root cause of its problem was poor quality data coming from its partners at almost every stage of its claims life cycle. Symptoms included excessive errors, limited data for operational decision making and process improvement, significant manual efforts to resolve problems and an unacceptable level of valid transactions being reprocessed.

Taken together, these issues prevented the Medicaid program from reducing day-to-day operating costs, providing timely data analysis and reporting for internal and external constituents. By leveraging new claims management technologies, the program was able to improve data quality and administrative efficiency, enabling it to cut processing times in half, reduce error rates and reduce claim utilizations by 62 percent. It also cut $4 million in operational and IT costs.

But beyond mandate compliance and the immediate cost savings, theres something greater at stake. With wider availability and greater sharing of data come the ability to transform health care in ways we have not yet imagined. The widespread adoption and sharing of digitized health data will propel us into the third and most promising phase of digitization: analytics. Health care organizations with access to rich health care data will be able to identify treatment patterns and disease management trends that will shape improvements in procedures, care and outcomes.

With the promise of improved analytics on the horizon, theres no telling how much more we will be able to accomplish. Health IT is at the center of attaining a truly value-based system of care, something I think we can all agree is better for everyone.

SUNNY SINGH is president and CEO of Edifecs, which provides software that streamlines the processing of health care information.