Providence St. Joseph Health has bought a revenue-cycle management company based on blockchain technology, an acquisition it hopes will help it better manage those operations.
The Renton, Wash.-based integrated healthcare system hopes Lumedic will make what are often archaic systems of collecting, analyzing and distributing claims and billing more efficient. Fragmented revenue-cycle management processes added more than $500 billion in U.S. healthcare costs in 2018 alone, according to a McKinsey & Company analysis.
“New technologies like blockchain, artificial intelligence and machine learning give us an opportunity to view the complexities of today’s health systems through a different lens,” Venkat Bhamidipati, Providence St. Joseph Health chief financial officer, said in prepared remarks.
The 51-hospital Providence St. Joseph Health system plans to form a new company that will maintain the Lumedic brand and operating approach. They plan to explore other partnerships with provider, insurers and stakeholders across the industry.
Blockchain has matured through the financial sector as it tracked banking and stock transactions. It holds the promise of storing and disseminating data through a secure medium, where no single person can tamper with records. Ideally, a shared transactional ledger can potentially allow payers and providers to reduce claims denials and efficiently secure patient payments. This could potentially lower administrative costs and ease friction between payers, providers and patients, Lumedic CEO Lincoln Popp told Modern Healthcare.
“If we can get better communication and sharing of information between payers and providers, that can go a long way for making the patient experience better,” he said.
Looking at prior authorizations, a hospital employee typically would have to track down information on a payer’s website, find the medical codes that require prior authorizations and hope it is up to date. The blockchain-enabled technology can constantly update a decentralized ledger in real time rather than individually validating or updating files or data systems. It is also much more scalable given that the prior authorization data could be made available to multiple providers, Popp said. In addition to the inherent security of data decentralization, distributed ledger and blockchain technologies also leverage modern cryptographic techniques, making these systems significantly harder to hack and therefore easier to trust, he explained.
Lumedic’s technology uses smart contracts that are translated into code. If providers and payers are able to agree on the specific terms, they could automate the execution and payment process. It would eliminate any faxing, phone calls or other manual ways of pulling pieces of data from different areas. Each change is noted and preserved so parties can review any amendments.
The first generation of improvements to revenue cycle with scripts and bots are aimed at speeding up existing processes, Popp said.
“We are trying to change the process more significantly by improving relationships between payers and providers,” he said.
The technological application of blockchain in healthcare is vast. The bigger challenge is on the business end, Popp said.
“Getting payers and providers that really want to streamline and remove friction form the process—that is the business challenge,” he said. “Hopeful you will get some large-scale innovative providers and payers to come together to really improve the relationship between the two sides so you can take some cost out of the process.”