EDI companies to watch.
The product life cycle for healthcare electronic data interchange See EDI.
(application, communications) electronic data interchange - (EDI) The exchange of standardised document forms between computer systems for business use. EDI is part of electronic commerce. (EDI (Electronic Data Interchange) The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations. Third parties provide EDI services that enable organizations with different equipment to connect. ) has shifted phases from introduction to growth. In addition, recent consolidations suggest a phase shift. Financial cases for these acquisitions could not have been made earlier.
What is EDI?
EDI is: "The exchange of routine business transactions in a computer-processible format, covering such traditional applications as inquiries, planning, purchasing, acknowledgments, pricing, order status and financial reporting." (DISA 1. (body) DISA - Defense Information Systems Agency.
2. (standard) DISA - Data Interchange Standards Association. 1991)
Healthcare EDI is different from that in other industries because the business of healthcare is healthcare. EDI transaction sets should not be limited to standard business transactions. Financial transactions between insurance-trading partners were first automated, mirroring revenue dependence on insurance. EDI transaction sets were developed for paper-claims transactions. Other financial transactions automated were the EOMB EOMB Explanation of Medicare Benefits
EOMB East Oakland Moto Bros (Oakland, California motorcycle club)
EOMB Extraocular Muscle Balance , eligibility/benefit inquiry, benefit enrollment and claim-status inquiry.
No EDI standard transaction set exists for the managed-care encounter. This lags behind the growth of managed care as a health benefit. Subsets of the UB-92 and HCFA-1500NSF NSF - National Science Foundation are used. It has been, however, at the expense of uniformity and data consistency Data consistency summarizes the validity, accuracy, usability and integrity of related data between applications and across the IT enterprise. This ensures that each user observes a consistent view of the data, including visible changes made by the user's own transactions and . Through HCFA HCFA
Health Care Financing Administration
n.pr See Health Care Financing Administration. , a standard managed-care encounter EDI transaction set may emerge in the next two years.
EDI supporting the clinical practice of medicine will increase. It will support remote physician/physician and physician/facility transactions. Standards will include requests and responses for patient information, order entry and results reporting, scheduling for beds, appointments and treatment facilities. An approved ASC ASC Ambulatory surgery center, see there X12 transaction set already exists for laboratory reporting and a patient information transaction set is already proposed and in the ballot stage.
Managed-care and clinical EDI transactions should more than offset volume declines of financial transaction sets tied to insurance. More than 30 percent of employees with healthcare benefits coverage are enrolled in HMOs, and penetration is still growing. This growth is fundamental to the industry.
Managed care created a more transaction-rich environment than existed under the insurance model. Transactions were added for utilization review u·til·i·za·tion review
A process for monitoring the use, delivery, and cost-effectiveness of services, especially those provided by medical professionals. , case management and referral management. Provider operational difficulties stimulated interest in the benefits of EDI.
EDI company leaders
Which EDI firms will be big winners in second half of the 1990s? It is suggested that the winners will be: * Equifax, * QuadraMed, * CIS Cis (sĭs), same as Kish (1.)
(1) (CompuServe Information Service) See CompuServe.
(2) (Card Information S , * ENVOY, * NDC NDC National Drug Code
NDC NATO Defense College
NDC National Documentation Centre (National Hellenic Research Foundation, Athens, Greece)
NDC National Dairy Council
NDC National Democratic Congress (National Data Corporation), and * MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device.
(2) (Microwave Communications Inc. . * other firms to watch could be CyCare and RIMS.
With the exception of MCI, the companies predicted to be the top companies in the late 1990s are transaction switches with network capabilities (NDC and Envoy) or software developers with either extensive networks or value-added EDI applications for user access. MCI seems to have progressed further than any other telecommunications company See telecom company. in providing a suite of healthcare EDI software adding value to users of their network.
As the industry moves through its product life cycle, opportunity is passing from the smaller entrepreneurial firms to the larger corporate entities. These entities are in the EDI business because of strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. . The corporate planners reasoned that the healthcare EDI business would enhance their core businesses. They did not see it as the primary focus of their operations. This movement from small entrepreneurial firms to the larger, stronger corporate entities is expected as the industry shifts cycle phases from introduction toward growth and maturity.
Selection criteria for companies included as leaders in the late 1990s: * EDI experience, * strategy, * size and financial strength, * market share, and, * personnel.
Experience and personnel quality will make the greatest difference between the winners and the losers in the EDI marketplace.
Equifax has a well thought out and executed healthcare EDI corporate-development strategy. This strategy has positioned it for continuing growth in the physician segment of the market, which is the least EDI-saturated segment. Equifax's EDI strengths are the company's: 1. size and financial strength, 2. insulation from dependence upon healthcare EDI revenue for survival, 3. experience in nonhealthcare transaction processing Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time.
Transaction processing systems are the backbone of an organization because they update constantly. businesses, and 4. physician-segment industry strategy.
Equifax acquired ETS ETS Educational Testing Service (nonprofit private educational testing and measurement organization)
ETS Emergency Telecommunications Service
ETS Electronic Trading System
ETS Engineering (&) Technical Services (Electronic Tabulating Services) and CHN CHN China
CHN Canadian Health Network
CHN Coalition on Human Needs
CHN California Homeschool Network
CHN Cleveland Housing Network
CHN Center for Human Nutrition
CHN Carbon, Hydrogen, Nitrogen
CHN Community Health Nurse (Cooperative Healthcare Networks) - both in the physician market segment. On top of the acquisitions, Equifax strengthened its already strong position by making a $10 million investment in PCN 1. PCN - Program Composition Notation.
2. (communications) PCN - Personal Communication Network. (Physician Computer Network), a business directed at physician practice automation.
With the ETS acquisition, Equifax bought one of the largest national libraries of individual-payer formats. With the CHN acquisition, Equifax bought expertise in networking and point-of-service terminals. And, in the PCN transaction, Equifax bought a large direct-market entry into physician-practice automation. Equifax's core-credit reporting and transaction-processing businesses that are financially oriented allow it to meet almost any physician's office need for credit or transaction-processing services.
QuadraMed seems well positioned for continuing growth, possessing a broad portfolio of effective EDI products aimed at many segments of the healthcare market. The company seems to be profitable from operations and sufficiently capitalized, having recently undergone a successful second stage private placement. These funds are likely to be used for acquisitions to shore up any perceived product line weaknesses.
QuadraMed strengths are the company's: 1. expertise in managed care. 2. ownership of Coast Micro, a developer of the online segment of the NEIC NEIC National Earthquake Information Center (USGS)
NEIC National Energy Information Center (DOE, EIA)
NEIC Northeast Illinois Council (Boy Scouts of America) HCIN HCIN Hierarchical Crossbar Interconnection Network beneficiary eligibility transaction in 1992, and a writer of two widely used hospital claim EDI applications (AccuClaim and CUBE). 3. EDI-integrated healthcare datarepository application directed at managed care and emerging CHI market segments, which was selected as the vendor for the Iowa CHIN.
QuadraMed combines skills in number of software areas important to the further development of integrated healthcare EDI products These areas include receivables tracking, EDI claims editing and translation medical coding editing as well a claims data-repository design.
CIS has the dominant market share of the hospital claims EDI market. This positions it to be a continuing market leader. CIS participated in the New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Single Payer demonstration project. CIS has recently strengthened itself in physician claims marketing. CIS strengths are the company's: 1. dominant marketshare in hospital claims transaction processing, 2. implementation of creative financial strategies (e.g., its recent $19 million GE Capital and Banker's Trust transactions), and 3. name recognition in target markets.
NDC is major player in bank credit card transaction processing. The company has also been involved in healthcare software development and EDI. Its personnel were recruited from the management of smaller healthcare EDI competitors. NDC's strengths are the company's: 1. pharmacy management software, 2. financial and pharmacy transaction processing, 3. improved financial performance, 4. reemployment of critical healthcare EDI personnel, and 5. the extension of its EDI capabilities into the hospital market through its acquisition of Learned-Mahn.
Envoy gained the market lead in pharmacy-claims processing through pricing in 1992-1993. Envoy sold its financial transaction processing segment in 1994. The company's management is experienced in financial-transactions processing. Envoy's strengthened this team with essential healthcare EDI personnel.Envoy's strengths are the company's: 1. exclusive focus on healthcare, 2. financial strength, 3. leadership in the pharmacy-claims switching market segment, 4. personnel with a proven record of EDI business strategy success, and 5. the addition of dental- and medical-claims processing expertise through acquisition.
CyCare has long played a major role in the development of healthcare EDI. The company was a founding member of AFEHCT AFEHCT Association for Electronic Health Care Transactions . CyCare is a strong proponent of EDI standards and has invested in government education efforts to convince both regulators and legislators of the importance of standards. The company was the only major physician-information-system vendor to see the benefit in developing a transactions clearinghouse.CyCare's strengths are the company's: 1. market share leadership in physician transaction processing, 2. segregation of information systems and transaction processing business, 3. renewed Financial strength, 4. renewed success in systems sales, increasing the company's transaction-processing base market, and 5. a CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. dedicated to the success of the EDI business.
RIMS was among the first claims-adjudication systems vendors to see the cost savings available from linkages between EDI and benefit-management systems. The company acted on its perceptions and acquired value-added EDI technology for its users. RIMS has added scanning capabilities to its product line and a health data repository/decision-support system to its line of Edi-linked benefit-management products. RIMs' strengths are the company's: 1. strategic vision focuses on the interconnection of benefit management and a wide variety of technology facilitators, 2. strong market leadership position, 3. quality reputation, and 4. hands-on experience with client implementation of EDI applications.