Payers, Providers Vie for Piece of e-Payment Pie

Christopher Cheney, July 9, 2014

Health insurers are expected to save billions of dollars in billing expenses by offering e-payment to providers. But some innovative e-payment mechanisms are laced with fees, raising questions about fairness.

In an industry as big and bloated as healthcare, cutting costs is necessary, but insufficient on its own to combat waste. As cost-cutting generates windfalls, industry stakeholders also need to find a fair way to divvy up the cost-savings spoils.

Many observers have compared the reform-roiled healthcare industry to the Wild Wild West. The temptation to draw open-frontier analogies is irresistible, and I have galloped down that dusty trail for a story about the Pioneer ACO program.

With opportunity aplenty, fairness is a topic that has not arisen often; until last week, when I set out to explore healthcare's electronic payment frontier.

The feds launched an e-payment Gold Rush this year: requiring insurers to start offering e-payment to providers, which offers a number of benefits because paper checks come with administrative and mailing costs, which add up to billions of dollars of expenses for payers.

A 2012 Institute of Medicine report estimates that waste linked to paperwork and administration costs the healthcare industry about $190 billion annually. A 2010 study conducted by several industry stakeholders pegs the potential yearly cost savings from e-payment at $11 billion.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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