Providence St. Joseph Health has acquired Seattle-based Lumedic, a revenue cycle management company based on blockchain technology, with the aim of streamlining data sharing and improving claims processing.
The Renton, Washington-based health system announced at the 2019 Healthcare Information Management Systems Society (HIMSS) Annual Conference & Exhibition that it plans to leverage the blockchain platform to reduce inefficiencies in revenue cycle management. Terms of the deal were not disclosed.
Traditional health system and hospital revenue cycle processes frequently rely on physical correspondence and fax machines for sending medical records, legacy systems for data storage, and employees who spend hours calling insurers on the status of claims. In addition to the cumbersome workflow, healthcare billing and claims is still largely a manual process, which introduces the potential for errors.
Revenue cycle inefficiencies were responsible for more than $500 billion in U.S. health care costs in 2018 alone, largely due to industry complexities and manual processes, according to a McKinsey & Company analysis.
Providence St. Joseph Health, a not-for-profit Catholic healthcare system operating multiple hospitals across five states, said it is the first integrated provider-payer system to establish a scalable blockchain platform to modernize claims processing and enhance interoperability between providers and payers.
“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. “Our acquisition of Lumedic’s innovative platform is yet another example of how we are pursuing all avenues of transformation, allowing us to redirect unnecessary spend towards either patient savings or care.”
“By disrupting these often cumbersome processes ourselves, we strive to lower administrative costs for both parties while getting deeper insight into the financial experience of patients and the ways we can simplify the process for them,” said Rhonda Medows, M.D., Providence St. Joseph Health president of population health and chief executive officer, Ayin Health Solutions.
Several healthcare collaborations have launched in the past year with a focus on using blockchain technology for healthcare use cases, with many initiatives aimed at increasing efficiencies in administrative processes. Insurers Aetna, Anthem and Health Care Service Corporation recently announced a collaboration with IBM to launch a blockchain healthcare network to address a range of industry challenges, including “promoting efficient claims and payment processing and maintaining current and accurate provider directories.”
In December, Change Healthcare bolstered its existing blockchain platform by acquiring blockchain startup PokitDok.
Lumedic, which launched last year, uses blockchain technology to modernize the financial operations of healthcare by creating more price transparency and speeding up the billing and claims process for healthcare providers, the company said. The platform builds on distributed ledger technology, smart contracts, and machine learning to deploy a more efficient revenue cycle, from eligibility to pre-authorization to billing.
According to Lumedic, blockchain technology has the potential to modernize revenue cycle management as distributed ledgers are collaborative databases which allow multiple parties to share data with each other securely, privately and efficiently. As healthcare is a collaborative industry, requiring communication between payers, providers, and other third parties, blockchain technology can be valuable when changes to contract terms become necessary, the company said. The use of blockchain technology also can enhance the patient financial experience by providing “an always current, transparent, accurate and secure single reference point for patients with information from all parties.”
The health system has acquired Lumedic’s assets and team and plans to form a new company that will maintain the Lumedic brand. Lumedic will work with Providence St. Joseph Health sign up partnerships with providers, insurers, and other healthcare stakeholders.