Health-insurance companies are objects of derision in most physician's offices. Doctors and nurses gripe that insurers take too long to pay claims, or they deny claims for mysterious reasons that would require a PhD in logic to decode. One entrepreneur with a famous pedigree wants to hold health payers accountable for those faults: Jonathan Bush, the first cousin of U.S. President George W. Bush and founder of Watertown (Mass.)-based health-IT company athenahealth (see BW Online, 3/28/05, "Crusader for Clearer E-Info").
On May 25, Jonathan Bush's company released a ranking of health insurers according to several measures of financial and administrative performance. Athenahealth culled the data from the 7,000 physician's offices that use its software, which handles back-office functions such as patient and insurance billing. While it's not a randomly selected sample, Bush believes his ranking provides a nonetheless valid window into the not-so-harmonious relationship between physicians and insurance companies. "We set a priori ratings based on what we thought drove the pain-in-the-butt factors of physician practices," Bush says. (Click here for a Video View of BW's interview with Jonathan Bush.)
Doctors were asked to make ratings based on how easy it is to work with insurers. Their top issue, naturally, was financial performance -- namely, how long it takes payers to process claims and what percentage of claims are paid within 90 days of an initial submission. Next on the priorities list is administrative performance, including how often payers deny claims, lose them, or require physicians to make follow-up calls for clarification. Finally, insurers were rated on how often they deny claims for reasons that are overly cryptic. The ranking, titled PayerView, was published in the June issue of trade publication Physicians Practice (see BW Online, 5/13/06, "Battling Health Insurers").
Here's how some of the nation's major players stacked up: Louisville-based Humana (HUM) came out on top, with strong showings in the metrics that matter most to doctors. Medicare came in a close second. Wellpoint (WLP), the largest nongovernment health-care provider in the country, finished last. Bush believes that the insurers that have invested most heavily in improving their electronic claims-processing systems are the ones that ended up on top. Humana, he says, has simplified its relationship with physicians by implementing a single technology clearinghouse, where all claims are sent.
UNWELL SYSTEMS. Bruce Perkins, senior vice-president of national contracting for Humana, says electronic claims now account for 90% of all the claims it receives. "If we can handle them without any human interaction, great -- that's what our providers want," Perkins says. As for the claims that are sent by regular mail, they go to a single address, where processors immediately scan them and shuttle them into the electronic system. Humana, which has been working on the system for several years, has cut the time it takes to pay claims by 50%, Perkins estimates.
WellPoint's poor showing on athenahealth's ranking may be partly a byproduct of a recent string of acquisitions, which has forced the company to integrate many different electronic claims-processing systems. The lack of a single gateway for receiving claims, Bush says, can result in "a Dilbert-level game of telephone," referring to the comic strip satirizing a micromanaged office. That can mean claims getting lost or mismanaged in a bureaucratic maze of technology. According to the data, WellPoint takes about 37 days to pay a claim, and it pays 85% of claims upon first submission. Humana, by contrast, takes 29 days to pay a claim, and it pays 88% of claims upon first submission.
While WellPoint spokesman Jim Kappel acknowledges that the Indianapolis-based giant is still integrating its electronic systems, he has some gripes with athenahealth's rankings. "The sample size was very small compared to the number of claims WellPoint processes," Kappel says. He adds that WellPoint contracts with an independent research company to survey 8,000 physician's-office managers, and the results have been starkly different from athenahealth's data. "WellPoint ranks higher than all our competitors," on service, communication, payment policies, and fairness, he says. "It's a much different story than what's portrayed here. What athenahealth has published is purely a marketing tool designed to drive up business."
SINGULAR CURE. It remains to be seen whether the PayerView will promote change on the part of insurers. After all, many physicians don't have much choice when it comes to deciding which insurance plans to accept. A practice that decides to drop WellPoint, for example, could lose so many patients that it struggles to stay afloat.
Bob Keaveney, executive editor of Physicians Practice, says he believes the rankings will at least give physicians some leverage when they talk to health insurers about performance. "How do you go to a payer to say, 'You guys aren't paying me on time'?" Keaveney asks. "What we wanted to do was begin the conversation."
Bush believes that fostering better relationships between physicians and health insurers will help fix a health-care system that he says is severely broken. Unlike his cousin the President (their fathers are brothers), the entrepreneur doesn't think the electronic health records the federal government is talking up will do much to improve how health care is delivered in this country (see BW Online, 1/31/06, "Health Care's Electronic Elixir?").
What's needed, he says, is a grassroots effort -- from both physicians and payers -- to improve the technology backbone that powers health care. That will ensure that claims get paid faster and more accurately. "The more sophisticated players understand the math," Bush says. "They understand that slow-pitching on claims won't make them money."
Athenahealth will soon launch a PayerView Web site, where insurance-company rankings will be updated on a regular basis. At least some health payers don't mind having a watchdog assessing their performance. "In general, the [health-insurance] industry gets a bad rap from providers," says Bruce Goodman, senior vice president and chief service and information officer of Humana. "Moving all of us to best practice methods will be good for everybody."
Weintraub is the Science editor for BusinessWeek in New York
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