EDI in Healthcare and Insurance

  June 27, 2012       By Ray Atia
Paperwork is a big part of the healthcare system, and a major reason that so many healthcare systems, especially in the United States, are so expensive. There are an enormous amount of documents and forms used in healthcare, and to make things more complicated, different insurance companies use forms and documents specific to their company. This makes the administrative aspect of healthcare paperwork quite an undertaking. Since there are more than 50,000 hospitals and pharmacies, and more than 10 million healthcare employees, the healthcare industry is an ideal candidate for EDI. Since the late 1980s many major companies have been using ASC X12 in place of their proprietary EDI systems. ASC X12 allowed the companies to communicate more quickly and efficiently with each other. In 1991, the Healthcare EDI Corporation (HEDIC) was created to help with education about EDI and to help hospitals and suppliers transition to the use of EDI. Today, volunteers help by participating in the development of the ASC X12 standards, which addresses areas like procurement, settlement, and patient information. As the standards are set, special care is taken to protect patient privacy as sensitive information is sent via telephone and computer systems. In September 1995, the Efficient Healthcare Consumer Response (EHCR) was started to cut unnecessary costs from the medical supply chain. EHCR reported that about half of the costs in the supply chain, which totals $11 billion, are unnecessary. The movement recommends adopting the best practices and using technologies that include the Health Industry Number (HIN), which identifies all healthcare products. They also recommend the use of bar codes and EDI. The real objective of EHCR, through the use of EDI, is to progress the healthcare industry from its current emphasis on using EDI for the exchange of claims processing toward clinical data access and, ultimately, real-time access to information that needs to be exchanged in the healthcare industry.