What can the healthcare industry learn from the financial services industry? The parallels may not seem obvious to an outsider, but the evolution of the financial services industry and the impact on the use of credit may in fact provide valuable guidance for healthcare executives.
Fundamentally, the issues faced by financial institutions are remarkably similar to those the healthcare industry is grappling with today. Regardless of your seat at the healthcare table, payers and providers alike are faced with the same challenges that plagued the financial services industry – how to identify risk, manage the risk and engage customers to secure their business. As financial executives will tell you, the key to successfully managing all of these factors lies in the data.
Historically, the local and regional credit grantors within the financial services industry housed historical information about its own customers. This information included identity information, financial well-being information and historical payment practices. The credit grantor could use this information internally to assess and limit risk with respect to financial transactions with its customers. Eventually groups of credit grantors began sharing information but the process of gathering and sharing the necessary information was still far from efficient.
As the industry evolved and consolidation of information began to occur, a need to standardize and digitize that financial information became obvious. Out of this consolidation, the three major credit reporting agencies (CRAs), with TransUnion being one of them, became the central repositories for consumer credit data. Today, hundreds of millions of transactions are reported on a monthly basis to each of the three major CRAs. The information is compiled, standardized and available to support instantaneous decisions relative to issuing credit throughout the U.S. Similar systems are becoming commonplace in many other countries as well.
The healthcare industry today looks eerily similar to the financial services industry of years past. Medical information is abundant, but is housed in individual hospitals and physician offices in paper and increasingly electronic formats. A series of recent legislative acts are forcing the industry to standardize and digitize this information so it can be shared amongst the constituents.
As the healthcare industry begins to implement data standards and digitize the information, a host of questions need to be answered. How will this information be secured? Can historical information be compiled? Once compiled, how will the information be correctly indexed to the appropriate individuals? Who can access the information? Can the information be synthesized to deliver the right information to the right party at the right time?
While all of the answers are not yet obvious, the healthcare industry is in process of laying the foundation for the digitization of data. Electronic Health Records (EHR), Practice Management Systems (PMS) and Healthcare Information Exchanges (HIE) will be key components to the storage and transfer of information from local owners to the ultimate decision makers. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 defined the standards by which the data will be reported.
A monumental challenge facing the healthcare industry is how to appropriately index the historical and future information in HIEs or Clinical Data Repositories. Today, each individual organization employs a form of Electronic Master Patient Index (EMPI) to correctly identify, organize and compile the information within their system. As electronic data begins to move from its source to a requesting organization, how will that information be indexed to ensure it is relevant to the patient being treated? In this case, the credit bureaus may hold the solution within their matching algorithms for financial transactions.
Ultimately, the healthcare industry will evolve into a completely digitized data generating behemoth. Technology innovators in the industry will continue to develop real time transaction processing solutions to deliver clinical and financial data to all constituents in the healthcare industry. A key to success in the digitized healthcare world will be distilling that data into meaningful decision making outputs and delivering that data to the appropriate users – data intelligence in an instant!
Evidence of data driven decision-making is strewn throughout the healthcare industry today. Real time identity verification is ensuring appropriate registration information at the point of service reducing errors and preventing fraud. Insurance eligibility transactions allow healthcare providers to verify coverage and benefits ensuring appropriate reimbursement. Drug interaction messages are being sent as prescriptions are written lowering the incidence of medical errors. Lab results are being delivered immediately upon completion to facilitate correct diagnoses and speed treatment. While the above examples are certainly encouraging, they represent the tip of the healthcare data iceberg.
Digitization, consolidation and real time delivery of data will allow healthcare constituents to identify health risk, manage that risk and improve patient satisfaction. We are all striving for a world in which healthcare costs are manageable and quality outcomes are vastly improved. Studying other markets, like the financial services industry and their use of data to drive decisions certainly warrants a closer look. At the end of the day, don’t reinvent the wheel, just borrow the blueprint.
James Bohnsack is Vice President of TransUnion Healthcare.