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Why is the XBRL community so disinterested in the Medical Banking space?

Posted by ED

From "Designing the Healthcare Financial Network of the Future" By John Casillas

The U.S. healthcare system represents some $2.5 trillion annually and growing. Hidden within the cost of the infrastructure are the diversity of methods used to manage money and associated remittance data. Incremental advances in this area could result in systemic savings across the healthcare stakeholders. While existing regulations under the Health Insurance Portability and Accountability Act (HIPAA or “the Act”) recognize the value of this critical area (as specified in the Administrative Simplification provisions of the Act), the advancement of industry-wide and systemic programs, best practices and standards to capture this value have proven remarkably tedious and slow to implement.

A good example of unrealized value in this area is the comparative cost to transfer funds and remittance data in other industry segments (an area called ‘financial electronic data interchange’ or ‘FEDI’), at $5 more or less, versus a cost of $11 per payment or more in healthcare (Banker’s EDI Council, 1994). Extrapolation of this data suggests that the healthcare industry could save $35 billion annually by implementing electronic payments, inclusive of the ability to trigger workflow automation across the complex healthcare revenue cycle, like automating contractual allowances, denial management, contract management and more (Casillas, 2001). More recently, a new “Healthcare Efficiency Index” estimates a $30 billion savings could be attained by making improvements that include this vital area (see http://www.save30billion.com )

[ED: XBRL as a technology could hasten John's predictions but nobody seems interested in the slightest. If I'm wrong please see http://www.mbproject.org/8MBI2010.php ]

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Paul Wilkinson, CEO at paulwilkinson.com responds:

Perhaps the same challenge we had implementing XBRL in the financial reporting sector is part of the answer: those $30 billion or $35 billion or whatever "savings" aren't really savings if you're the one billing companies for those monies today -- whether you're an outsourced firm or someone in the internal department responsible for your large and important existing business process. One person's "savings" are another person's "losings." Therefore, there's not just plain old fear, uncertainty and doubt to address -- there are strong incentives for many current market participants to paint change as "high risk," tell their customers and their employers there are more important priorities, and that they should "let other people go first" with all of this scary technology stuff.

With such a large health information ecosystem, and so many long-term information technology contracts and projects already in place, and many of the unnecessary costs being paid and managed by non-profits or by people who believe their main purpose in life is helping patients, not promoting efficiency, it probably shouldn't be a surprise that innovative energies devoted to the ultimate mission of improving medicine are directed more at improving treatments and less at improving how the back office works.

Also, HHS apparently has yet to fully realize that it could do exactly what the FDIC and SEC did and simply mandate the use of an open technology standard like XBRL. In fact, XBRL would be a good standard for lots of health related data. Automated data validation and low- or no-cost software upgrades via taxonomy updates and access to the existing XBRL technology infrastructure would all be wonderful in the health sector. Heck, the FDIC and the SEC have already laid the foundation for the necessary cost/benefit analysis, and despite all the FUD, found the benefits to exceed the costs. But those $30 billion or $35 billion losers are sure to explain to HHS and everyone else who will listen to them in painful detail every reason they can conceive why an open technology standard would be a bad idea and why they should move s l o w l y.

The good news is that on my last trip to DC, I met some new HHS people who understand this and who are quietly leading to do the right thing -- and this is from someone who spent 16 years in DC working for leaders of what today is the minority party. And more good news is that market pressures always prevail, even if they don't do so as quickly as we like. Someone will find a value proposition for an open technology standard. I've been working with http://www.cloudinc.org -- looking at ways to avoid reinventing perfectly good technologies that XBRL has already developed and offering a new value proposition: A domain that's based not on a particular industry, but on the end user -- people.

February 18, 2010 in Medical Banking Blogging | Permalink


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