Slaying the demon of hospital billing with Blockchain

Blockchain can incredibly enhance the value of healthcare operations but it won’t be a panacea for all the problems plaguing this sector. Nonetheless, blockchain implementation in healthcare would certainly be a step in the right direction! So, its important to figure out what problems can be solved by the adoption of blockchain.

According to some reports, including one excellent publication by Cox BLUE, titled — “Blockchain Has The Power to Transform Healthcare — This Is Why”, the top 5 blockchain applications would ideally include -

1. Medical Data Management
2. Claims & Billing Management
3. Data Security
4. Medical Research
5. Drug Development & Supply Chain

Out of the above 5 applications listed above, claims and billing management seems to be the least significant; but the truth is actually quite far from it. People often end-up wondering why does hospitals end up spending a sizable chunk on hospital billing process (10–20% of total cost). It should be fairly simple process like 1,2 & 3. Right???

1. Patients check-in hospitals with/without insurance (declaring it beforehand) & get treated.
2. Patients check-out and receives the bill mentioning the due amount.
3. If they are insured the tab is picked up by the insurance company; if not the patient pays out of pocket.

But this assumption is soooo wrong, simply because hospitals don’t expect to get paid the billed amount. So, often times they overcharge 5 to 10 times more than the actual amount, as long it doesn't bill for wrong or unjustified treatment (Hospitals cant be prosecuted for overcharging). It’s not something hospital would ideally like to do but they have to; owing to the fact that each insurance company will only pay a pre-negotiated amount, which might be a fraction of the actual costs. The method of insurance claiming can vary from one insurance payor to another as some pay by the day of hospitalization while others pay a flat fee for any particular kind of surgery. This leads to a big discrepancy in the amount receivables and thus hospitals make a list of things that they can ideally charge without bothering about the nitty-gritty of each insurance claim.

Now on the other hand, it’s not that the insurance companies wouldn’t want to pay up but they too have realized that most hospitals overcharge for their services. So, in this game of cat and mouse between large hospitals & insurance companies its the small hospitals/clinics and patients who suffer most. If god forbid patients forget to pay their premiums leading to a lapsed insurance or even worse they don’t purchase any health insurance, they are forced to pay the whole amount out of their pockets. This can dent a significant hole in their financial status and often leads to bankruptcy. Although patients can negotiate and lower down the billed amount but they come nowhere close to getting deals what insurance companies would command (More often then not patients aren't event aware of this). This shows how broken the whole health system has become in some parts of the world. Thus, hospitals are left chasing insurance companies and customers to recover dues which can often take a long time and effort, necessitating a dedicated team of workers following it. This is often the reason for high administrative costs in any hospital!

Blockchain offers a solution to this problem plaguing the healthcare sector. By digitalizing the insurance claim process- hospitals, insurance companies and patients all come out on the winning side. Smart health insurances are the way ahead to deal with this issue and DTCO might just have the right solution for your needs in the form of one of its products Personal Health Record OS or phrOS!!! Stay tuned to know more!