Friday, May 30, 2008

Aetna and the Fundamentals of Claims Processing

The Disease Management Care Blog doesn't think that an association between the timely payment of claims and smartly using claims data bases to spot quality lapses is incidental. What's more, shouldn't alerts to providers not only go out by phone, fax, mail and smoke signal, but electronically using the same system physicians use to get their money? Executing on all three is probably causal, but which causes which?

Something deeper at Aetna is going on. I quote CEO Ron Williams from the Q1 Earnings Call:

'Through our proprietary active healthcare engine, the clinical database which is an increasingly integral part of our business, we are able to deliver information that helps customers better manage quality and total costs. When combined with our broad array of technology tools for members that provide information about wellness, clinical quality, evidence-based care guidelines and other critical data, you essentially have, what I call our integrated proposition.'

Health insurance claims data bases are notoriously unwieldy, slow and traditionally designed for one purpose and one purpose only: to render a predetermined payment for a covered service for a covered member. The process is typically laborious, requiring a small army of IT and benefits managers using the 'hand-grenade' approach: close is good enough. While there are many anecdotes of unnecessaary provider payment delays and denials, the DMCB knows from his insurance days that the system can also result in provider over-payments.

Getting this right is hard work. It takes huge investments in human talent and information systems. What we're learning is that once the get-it-right foundation is built, the strategic implications are enormous.

Like much of the industry, Aetna is taking an unexciting and commoditized process and turning it into a competitive information advantage. However, Aetna appears to be executing particularly well. Accurate and efficient claims processing is what enables timely payment, quality improvement, patient empowerment, provider alerts, personal health records, pay for performance that doesn't lead the way in catching the ire of State Attorney Generals and competitive disease management programs.

As an aside, does anyone realistically think Medicare as usual can pull this off? Think again.

Maybe the contrast between Aetna's recent earning reports versus competitors Cigna and Wellpoint is not incidental either.....

Time will tell.

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