Boston, MA, USA
June 12, 2007 Healthcare
Transactions: What’s in the Forecast for Financial Institutions?
Report Published by Celent
Financial institutions and third party
processors can take out as much as US$50 billion of healthcare operating
costs annually if they can effectively automate healthcare providers’
revenue cycles and expedite exceptions handling.
Healthcare transaction processing is a
complex beast characterized by a large number of stakeholders, an
extensive transaction set, and significant inefficiencies resulting from
the extensive use of manual, paper-based processes. The sheer number and
complexity of healthcare transactions make it a ripe market for financial
institutions. The number of payer-provider transactions is huge. In 2006,
there were approximately 3.4 billion claims, which equate to roughly 1.1
billion payments (compared to 9.3 billion business-to-business payments).
In the inaugural report of its new Healthcare
Banking research service, Healthcare Transactions: What’s in the
Forecast for Financial Institutions, Celent discusses the complexities
of healthcare transaction processing as well as the opportunities the
market presents to financial institutions. Successful institutions stand
to gain not only on the transaction processing side of their business but
also on the credit side through stronger relationships with both providers
and payers.
Until recently, the healthcare sector
appeared to be unattractive due to its glacial adoption of automation and
lack of adherence to transaction standards. Today, the forecast is
brighter. Adoption of electronic transaction processing is growing, and
both financial institutions and nonfinancial competitors are staking out
territory to capture both mind share and market share.
“Only those financial institutions with
dedicated resources, proven domain expertise, sophisticated services, and
scale will win. FIs that have a stake or aspire to gain a stake in the
healthcare sector must offer value-added services along the revenue cycle
value chain and prove that they can play a critical role in exceptions
handling,” said Alenka Grealish,
co-author of the report and Managing Director of the Banking team.
Financial institutions won’t tackle this
market alone. “Leaders will expand their offerings by partnering with or
acquiring the more innovative third party vendors and clearinghouses and
integrating their technology with existing lockbox, cash management, and
treasury offerings,” adds Madhavi
Mantha, co-author of the report and senior analyst.
The report is 40 pages and contains 16
figures and four tables. A table of contents is available online. The
report highlights the healthcare banking initiatives of leading financial
institutions such as ABN AMRO, Bank of America, Commerce Bank, Fifth Third
Bank, JPMorgan Chase, KeyCorp, Mellon, PNC, and Wachovia.
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