"Lowering the Cost of Health Care through Collaboration" by Bruce Bullen

While medical costs, at nearly 90% of the health care dollar, drive most of the annual increase in health care premiums, there are very real opportunities to lower administrative costs through collaborations. The New England Healthcare EDI Network (NEHEN) and Healthcare Administrative Solutions Inc.a (HCAS) are two successful examples of such collaborative efforts.

NEHEN is a payer and provider owned electronic connectivity solution that processes 60 million transactions per year (80% of the state’s transactions) with a savings to members of $20 million annually in transaction fees alone. A subscription service with a low cost of ownership, NEHEN removes barriers to automation for members while simplifying and improving the accuracy of operational transactions. Benefits for health providers include reduced claim denials, reduction in bad debt and write-offs, and lower administrative costs. Benefits for health plans and members include increased accuracy and timeliness as well as lower processing costs. Currently over 50 hospitals, 5,000 physicians, and 8 health plans are NEHEN members.

HCAS, founded in January of 2005, is a nonprofit collaborative of major regional health plans dedicated to simplifying administrative processes. Its first initiative, a redesign of the provider credentialing process, has recently been completed. The new process enables providers renewing their health plan credentials or submitting credentials for the first time to use a single, standardized process established by HCAS. Previously, health plans administered different processes, requiring providers to submit similar information over and over again. Duplicative processes have been eliminated and replaced by a single process that delivers administrative cost savings, improved cycle times, and greater accuracy.

NEHEN and HCAS are just two examples of the kind of efficiencies that collaborations can produce. Such cooperative efforts hold great promise for lowering administrative costs. Who knows – perhaps the model can be employed to help reduce medical costs as well!

Bruce Bullen
Chief Operating Officer
Harvard Pilgrim Health Care