SM: What did you determine was significant about the Web in your marketplace, and is that the genesis of NaviNet?
TM: The Web enabled one organization to deliver a capability to a user. I felt that it was very powerful for healthcare and that the Web would be a far easier and more effective way to deal with fragmentation and complexity. Complexity could be distributed to several specific Web sites, where this complexity could be addressed around the business processes of a particular party such as healthcare providers or hospitals. That is the genesis of NaviNet.
SM: What was the value proposition you wanted to offer these different constituencies?
TM: We identified a method that we felt was the best way to gain critical mass. We would go to provider offices and try to automate their most frequent transactions with the outside world. By far the most frequent transaction was with the health plan.
BW: We then went to the health plans and proposed that instead of answering the calls from providers to field questions about benefit plans or claim status, we would create a capability to allow them to automate the business processes they carried out with their providers. Some customers had on the order of 50 different business processes that they automated. We have customers who will no longer accept calls from their providers because all of the information is available to them online. The savings to a health plan are very compelling for converting from paper and phone to electronic.
SM: Were your customers the healthcare providers or the health plans?
BW: Today we have 812,000 providers. Providers can be a combination of physicians, nurse practitioners, and even chiropractors. They are the end users of our system, but we also consider them to be our customers. In the beginning the initial customer was the payer, which is the insurance company.
SM: So initially the health plans were the ones buying the service?
BW: During the first ten years it was the insurance companies. The reason they were buying these services, this multi-payer portal called NaviNet, was because of the significant return on investment. If you are a provider using the telephone to do an eligibility benefits check on somebody, that phone call can cost the insurance company $11. The average provider in the United States, according to the American Medical Association, has to deal with nine different insurance companies in a given day. If a provider had to deal with nine different Web sites and remember nine different user names and passwords, then they would quit using the Web sites. Providers would use the easiest communication method they have, which is the telephone.
Telephone calls to insurance companies are very expensive. It is also expensive for health plan providers to run a Web site, especially if it does not get the level of traffic that a site like NaviNet gets.
SM: You have basically created a meta-portal and brought together all these insurance plans and physicians into one portal. The provider can then have one location to get the insurance coverage details of all their patients.
BW: That is correct. It is very important to understand that the providers do not pay to use NaviNet. We get paid by the insurance companies. The reason we have such a high adoption rate is due to the dynamic you just expressed. Having a multi-payer portal allowing physicians to transact with multiple health plans is far easier than dealing with multiple Web sites. We do everything from eligibility benefits, pre-certification, referrals, real-time claims look-up and adjudication to healthcare alerts and care gaps. In our first ten years we were doing over 48 separate and distinct transactions for health plans.
This past year we essentially went out to our provider base and asked them for their pain points. One of them was the ability to connect to CMS in Washington, D.C. They wanted to have a Medicare eligibility system. We started offering that in January of this year. We do charge providers for a three year subscription to utilize Medicare eligibility. It has been extremely successful. The average provider was turning around a hard copy-based claim with payment in about 128 days. They were experiencing a 44% error rate. We have reduced the error rate to under 5% and have increased remittance from 128 days to 28 days.