Thursday, February 14, 2008

HOW TO PAY FOR HEALTH CARE

The health care industry looks like a big plate of spaghetti. Many insurance carriers and medical service providers have internal back-office technology systems, but few connect with anyone else. Much communication between parties is cumbersome and manual. Creating a Health Care Clearing Corp. (HCCC) modeled on the successful experience of the financial services industry could be a significant step in cutting health care costs, says Stuart Z. Goldstein, a financial services executive in New York with a background in health care issues. How would the HCCC work?

> It would operate more like the hub of a wheel with spokes electronically linking medical service providers and insurance companies to a central point where data can be processed and exchanged.

> It would eliminate the need for medical service providers and insurance companies to manage separate procedures and processes to submit claims.

> Standardizing data exchange and recordkeeping would speed payment of claims.
Health care insurance carriers incur huge costs today by distributing millions of individual checks to cover their obligations to hospitals and physician groups. In contrast, firms in the securities industry pay for all their stock trading once a day, using the Federal Reserve's Fed wire system for electronic funds transfers.

In the coming presidential campaign, health care will be among the three issues (next to the economy and global leadership) deciding the election. Regardless of political party or persuasion, the answer to the rising tide of health-care costs lies not within the stars, but in forcing greater efficiency out of the current system.

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