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Building A National Health Information Network: NaviNet’s Brad Waugh and Tom Morrison (Part 3)

Posted on Friday, Jan 1st 2010

SM: When you developed your initial strategy, was it based entirely on receiving payments from health plan providers?

TM: Our goal was to streamline processes for payers as well as to create workflows that would enable us to provide additional clinical support to provider offices. For example, Aetna builds personal health records for many of their members, and we support them in that effort. One of the challenges in the industry is to get those types of records out to the provider offices where they can be used. We have national dialogue going on right now about health information exchange and how we are going to make it happen. We have to figure out who a patient is across multiple offices and pull all of that data together.

As part of the original design of the company, creating this network of providers gave us the ability to do things such as distribute personal health records and care alerts to providers. It solves one of the biggest problems in the industry. The stimulus bill is talking about paying providers for putting electronic medical records (EMRs) in place. One of the requirements is electronic communications among offices. There are very few ZIP codes in the country that currently have an operating health information exchange. We think we have demonstrated a viable architecture to facilitate that exchange.

SM: Does the government, at any level, pay for the Medicare service you implemented?

BW: No. We charge the physicians for that access. We made a deliberate decision to not charge the government. You may have heard many congressmen and senators say that healthcare is local. That is not true. I live in Rhode Island. If I have a serious heart issue, I am going to drive 60 miles north to Massachusetts for care. Healthcare is a national situation. In the creation of NaviNet, we believed that it had to be an environment where both payers and providers could transact. In the future, our aim is to add partners who can ride on our proverbial rails.

We are a connectivity play. There are folks out there who do things better than others. One of the major issues facing doctors in the United States is revenue cycle management. In 2000, a patient was responsible for 5% of their bill. In 2010 that patient will be responsible for 35% of the bill. If a patient does not pay the doctor in 28 days for the services rendered, the doctor has a less than 25% probability of ever seeing any money from that patient. It costs doctors $4 to collect every $1 they are owed.

Having a healthcare network allows providers throughout the United States to transact business on an administrative level as well as on a clinical level with insurance companies, governments and from provider to provider. When NaviNet was first formed in the early 1990s it was during Clinton’s first administration. That is when they came out with the Community Health Information Network, otherwise known as CHIN.

Later they came out with Regional Health Information Organization, known as RHIO. In every case, the reason the CHIN and RHIO failed to get adoption was because after the federal and state funds ran out, there was no sustainable model by which these networks could exist.

The early founders of NaviNet designed a sustainable model. You give a huge return on investment to health care companies. That incentivizes insurance companies to join a multi-payer portal. The economics for them is a one-year payoff.

SM: How much do you save them?

BW: We save the average insurance company about $2.65 per transaction.

This segment is part 3 in the series : Building A National Health Information Network: NaviNet’s Brad Waugh and Tom Morrison
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