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Web-enabling Health Care Transactions

By R. Donald McDaniel, Jr.

Ascendia Healthcare Management

Healthcare professionals are fully aware of the power of the Internet to provide content, self-help and marketing material. Almost every hospital and health system has a web site, which provides patients and other constituents an overview of their organization, the services they offer and often an introduction to key clinical and administration leadership. However, many healthcare organizations are just beginning to understand the opportunity to implement e-commerce activities. As is usually the case with investments in information technology, the healthcare industry is behind other industry sectors in the deployment of Internet tools to enable web-based transaction services. The use of Internet technology as a means to automate the many manual administrative and clinical transactions and processes amongst providers and between providers and various third parties should be a key component of an organization’s overall Internet strategy.

The Internet is a perfect vehicle for automating healthcare transactions for several reasons. First, the Internet is ubiquitous, largely because it is not dependent on a particular software program or hardware platform. This is critical because of the healthcare industry’s history of not making technology investments a priority. Since technology investment has not been a priority, there are numerous fragmented software applications and communications standards to deal with, not to mention thousands of business and clinical process applications. Therefore, the Internet can act as a systems integration vehicle that does not need various interface engines between applications to allow for connectivity. Second, related to administrative expenses in healthcare, the Internet can reduce operating costs, streamline complex business processes, minimize process errors, and enhance point of service capabilities. This is critical to the success of many providers due to their heavy transaction volume and the number of customer inquiries they handle, much of which could be streamlined or even eliminated with the implementation of an internet or intranet. As an indication of the current administrative burden in healthcare, the General Accounting Office has estimated that administrative costs account for as much as 25 percent of the typical cost of health care services.

As the Internet reduces general administrative expenses, it can also alleviate many of the managerial burdens felt by physicians and other caregivers, freeing them up to focus on patient care. Several recent studies indicate that as much as 38 percent of a physician’s time, and up to 50 percent of a nurse’s time is spent on managerial and administrative tasks. With the implementation of an Internet application, providers will have more time to benefit from other emerging technologies that afford them access to current clinical information at their fingertips. As this can be done even while interacting with their patients, it will surely lead to an enhancement of the clinical decision-making process, as well as the provider’s relationship with the patient.

An example of an Internet application being used to streamline administrative processes is the deployment of a web application that enables physician’s practices to determine a patient’s eligibility for certain benefits.This can be done without hassling a patient to intervene. Third, the Internet can collect, deliver and track data throughout an enterprise and across disparate applications, thereby transforming disparate enterprise-wide data into useful, meaningful information.  This can greatly improve a provider’s ability to act as a “virtual” data integrator, as well as provide its constituents with real-time and near real-time information that can enhance performance.

Relative to automating transactions, the power of the Internet, is in its ability to connect independent applications and systems through the use of “middleware” integration tools and technologies. For example, the combination of message brokering with Internet tools offers an aggressive method for collecting, integrating and presenting independent sources of data. The end-user need only to have a web browser to retrieve information from disparate data sources. With the use of a middleware application(s), an organization can create a three-tiered architecture consisting of the applications and systems level, the middleware level, and the use of a browser at the end-user level. This technology can be deployed and secured utilizing digital signature, digital encryption and other security technologies.  Finally, any Internet-transaction application needs to be fully-HIPAA (the data security guidelines from the Health Insurance Portability and Accountability Act) compliant, as well as compliant with any other pertinent regulatory or governmental requirements.

What are the transactions that can be automated via an Internet strategy? There are many transactions to be considered. There are a series of transactions aimed at improving processes for managed care populations, including: health plan eligibility, benefits review, referral authorization and review, claims status, claims submission, electronic remittance, etc. These likely most benefit providers that care for capitated members. In addition, applications are possible that allow health systems to offer their medical staff the ability to, via a web browser, order tests and receive results.

Other possible applications include the automation of the medical staff office; real-time prescription and drug interaction information; the “push” of certain medical or management content to providers that access a health system’s web page; the offering of continuing medical education (CME) on-line; or the offering of integrated clinical and financial data, reporting and benchmarking tools that are real-time and dynamic.

The sky is the limit when it comes to deployment of an Internet transaction strategy that can aid one’s organization. The Internet is no longer a luxury, but rather a necessity; a business imperative for providers in every market. Deployment of an Internet-transaction strategy can improve an organization’s standing with its key constituents, lower administrative costs and enhance its brand.


Mr. R. Donald McDaniel, Jr. is the Executive Vice President, Strategy and Development for Ascendia Healthcare Management, Owings Mills, MD.


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