Most Interesting Vendor: Emdeon — Simplifying the Business of Healthcare

June 13, 2013
With its connections to payers, providers, and vendors, Nashville, Tenn.-based Emdeon understands how to deliver solutions that best impact the flow of information for all parties to increase efficiency and maximize profitability. A company whose industry reputation has long been as a clearinghouse for medical claims, Emdeon has recently expanded its boundaries as the market continues to evolve.

A company whose industry reputation has long been as a clearinghouse for medical claims, Nashville, Tenn.-based Emdeon has recently expanded its boundaries as the market continues to evolve. And despite having that historical reputation, Emdeon CEO George Lazenby emphasizes that the clearinghouse business currently accounts for only about 14 percent of the company’s total revenue. “It’s a legacy of our company, and it’s an important strategic component of our business, but it’s not the majority,” he says.

Lazenby takes pride in the fact that Emdeon is “independent,” as he emphasizes. “The vision of our company, at the highest level, is to make healthcare efficient. What supports that vision is that we’re independent and central to the system. We’re not a pharmacy or a dental office or a physician office or a payer. Theoretically, when you are reducing the overall cost in a system, you could disadvantage a stakeholder. But we believe having that central position gives you an advantage in solving a problem that is very complex—in this case making healthcare more efficient.”

In recent years, Emdeon—whose wide-ranging network encompasses 340,000 providers, 1,200 government and commercial payers, 60,000 pharmacies, and 5,000 hospitals—has added applications to that independent central structure for its customers, including a suite of revenue cycle management solutions on the hospital side.  And the results have been there, says Lazenby.  “We have found that every efficiency that we provide in a hospital to make it more effective creates an efficiency on the payer side as well,” he says. “So the things that cause problems in the system are often a result of the unintentional consequences of the complexity of what we do.”


These days, says Lazenby, everyone is thinking about big data. But big data is more than just a wealth of information; it is an opportunity to find insights in new and emerging types of data and content. Enter Emdeon’s recent collaboration announced at this year’s HIMSS conference with Atigeo, a Bellevue, Wash.-based data analytics company. The two companies plan to collaborate on the development of new software solutions, and will explore the use of intelligent analytics layered on top of petabytes of healthcare data to improve health outcomes. The agreement calls for using Ategio’s x-Patterns data analytics platform to rapidly expose insights abstracted across vast repositories of structured and unstructured data. Not getting the data in the right condition to review in a relevant period of time has been a problem, says Lazenby. “We want to create that platform where our customers can be advantaged by the info that’s flowing through our systems in their efforts to reduce cost of care and make their workflow more efficient.”

George Lazenby

Atigeo CEO and founder Michael Sandoval says the combination of the data analytics platform and Emdeon’s data repository will reveal insights that would not have been possible before. He describes x-Patterns as a “data agnostic” platform with regard to whether the data is structured or non-structured. He says the way the x-Patterns platform absorbs and integrates data in a way that avoids the problems of traditional data mining with disparate data systems and dissimilar taxonomies.

“In true ‘big data,’ analysts talk about volume, variety and velocity,” Sandoval says. “We are able to do that well above the petabyte scale on the volume side, of any type of varietal, and in the velocity category in microseconds in an automated way.” He added that on the human language side, the platform is able to identify the proper context and apply the data against any existing application or workflow of the provider, “so that it appropriately optimizes the applications and workflows.”

David Talby, Ph.D., Atigeo’s vice president of engineering, says that one example of an application that was showcased at HIMSS13, was a hospital readmissions application that uses Atigeo’s analytics platform to build a statistical model for when a patient is likely to be readmitted. “We are thinking about the patient, have more signals, and we have the algorithm to actually use those signals,” he says. Talby adds that the collaboration encompasses national coverage, and that the application is compliant with the Health Insurance Portability and Accountability Act (HIPAA) regulations.

Emdeon has begun to take the next steps in terms of big data, creating views into the data that flow through the system and processes that allow its customers to have better insights in their business. For example, says Lazenby, the company’s web-based Vision for Claim Management tool (currently used by well over 100,000 providers) allows its customers to see in real time, the condition of their practices with regard to their billing, so they can see all claims processed each day. It helps them keep up with their business through a mobile device, and analytics is driving that, says Lazenby. “Instead of returning a big blob of data to our customers, we’re creating graphics and trends for them.”

Another aspect of the next real frontier of big data is around surveillance. To this end, Lazenby says Emdeon has started to look at specific activity, which based on the company’s central position, could prove to be very valuable to its customers. “For instance, because we see an electronic prescription flow through the system, and we see the subsequent prescription claim as a result of that prescription, you can determine that the patient was not only prescribed that prescription but also picked it up. The activity data is equally valuable from surveillance standpoint.” 

And while most healthcare analytics today are done on paid claim data that is probably 90-120 days removed from the date of service, Lazenby says that because Emdeon has access to that same information within eight days from the date of service on the medical claims side and same day on pharmacy side, it can give its customers the ability to intervene from what they derive from their analytics sooner than what they could do on their own. That’s a key to the company’s strategy, he says.

In a nutshell, Emdeon strategizes to advantage the system so it makes hospitals more effective. “All of our customers have the objective to pay accurately on time. They are not motivated to act any other way than that,” says Lazenby. “We don’t want to disadvantage either side; we just want to eliminate the inefficiencies. The better providers are at the process that we help them enable, the better the payers operation are as well. “

A real-world example of this is taking a look at a Medicaid recipient or a Medicaid advantage recipient that moved from plan to plan over the course of the relationship with the provider. If the system runs the eligibility verification transaction at the point of entry into the system, it improves the accuracy of the claim that is filed.  But if it doesn’t run that transaction, and the provider has in its patient history that Patient X is a member of Cigna, for instance, it might send the claim to Cigna not knowing that the patient switched payers. Cigna then gets that claim and if its systems aren’t paying attention to it, it may pay the bill. Now Cigna is in a situation where it paid for something it shouldn’t have and has to work to recover it. But according to Emdeon, if Cigna used the company’s eligibility service, that claim would have gone to the right payer in the beginning and efficiency would have been created. “That’s a way that it benefits the whole system,” says Lazenby. “The provider doesn’t have to go through denial process and the payer doesn’t have to go through process and claim would get routed appropriately and paid accurately.”


In the always-changing competitive landscape that is healthcare, Lazenby knows that Emdeon needs to be proactive to keep ahead of the pace. To this end, Lazenby describes how convergence has become a trend that will help Emdeon further solidify its position in the marketplace. Convergence, says Lazenby, involves stakeholders coming together (such as a payer buying a physician practice or a pharmacy performing true medical services), adding that Emdeon is well positioned to help the industry with the transition. “For example, when a pharmacist administers a medical benefit or a vaccination, Emdeon can handle that transition from pharmacy workflow to medical benefit seamlessly because we see all those stakeholders. We know a pharmacy’s workflow and processes and we also know the medical billing workflow and processes—pharmacies don’t know that.”

Lazenby also feels Emdeon’s natural point of integration will be an advantage if or when that convergence happens. “What has been key for us in being able to process the six billion transactions we do annually is the ability to integrate with an interface to virtually every system type in the industry, whether it’s a pharmacy system, payer administrative system, EMR vendor, or anything else. So when a hospital requires 15 different physician practices and they’re all on different systems, we have become a nice way for that hospital to aggregate information about those physician practices that’s in real time and monitor that behavior. If we have confidence at anything, it’s integrating,” Lazenby says.

Theoretically, getting everyone on the same system and pulling information from one’s own internal capability would be ideal. But practically, that takes years to develop, Lazenby admits. “A lot of our customers would not have to force their stakeholders to completely change their systems to get access to information that Emdeon already has. So as things converge, we help bridge the gaps and knowledge and because we’re that natural point of aggregation, we help give an enterprise-wide view for a hospital across physician practices without causing those practices to change systems and move from one vendor the next.”

Undoubtedly, the market will have to transition from fee-for-service to value-based reimbursement in order for overall reform to meaningfully take hold. And that’s complicated, says Lazenby, pointing out that Emdeon’s independent state allows its customers gain insight to what happens under various changes. ICD-10, for example, will change the way payers pay and providers bill because the number of codes will expand so dramatically. Emdeon will give a payer and/or a provider insights into the trends so that there aren’t any unintended consequences, says Lazenby.  “And not every payer will make transition to ICD-10 at the same time (nor will every provider), but we will help manage it,” he says. A provider may be doing business with 50 payers or 150 payers, and as they change and implement new capabilities, Emdeon needs to be in position to accept those limitations that exist on each side. At the end of the day, this market is very dynamic, and as it changes, we need to help our customers transition through it. That is our biggest challenge.”

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