Thelma cleans up health care paperwork

A hopeful young thing called Thelma is wielding an electronic broom with growing effect in the paper-clogged corridors of Australia's health industry.

Thelma is a different breed of electronic exchange in an era dominated by e-marketplaces like corProcure, Covisint and PECC.

Unlike those high-profile players, Thelma is shunning the e-procurement space to take on what may be a tougher battle. It is trying to crack the addiction of hospitals and health funds to paper-based patient payment records.

And it's pinning its prospects for success on transaction fees, a business model its e-procurement cousins have not been able to effectively apply.

Among those hoping Thelma can pull off the trick is Rod Wright, IT director of Australian Health Management Group (AHMG), which oversees about seven funds. From a purely IT perspective, AHMG is one of many health insurance funds and hospitals that have been ready for the shift from paper to electronic messages for years, Wright says.

But progress has been halting because of industry infrastructure and cultural issues. The priority for hospitals is treating patients, not electronic re-tooling of the excellent paper-pushing skills they have developed.

The fragmented nature of a trading community made up of hundreds of independent hospitals and dozens of funds also works against implementing new electronic transaction standards, with the different business protocols, data standards and technology platforms in the community imposing prohibitive costs on developing B2B connections.

Health funds like AHMG have long seen the benefits of moving to electronic messaging but "as relatively small players, we are not of great interest to some of the big hospitals", says Wright. "Thelma's advantage is it can bring five or six organisations of our size together into something that might represent a large part of a hospital's business."

Thelma is basically an electronic hub or collaborative exchange that channels patient claims and payments between health funds and health carers. Its comfortable acronym hides the more descriptive full name of Transactional Health Exchange Linking Multiple Networks.

It is operated by ICSGlobal, a public company floated in 1999 whose major shareholders are a number of financial organisations, and has absorbed about $5 million in development costs.

Besides an aggregating effect, Thelma performs the grunt work of translating paper forms into electronic formats and ensures the electronic data conforms to a client organisation's business rules, says ICSGlobal director of health care, Greg King.

Early on it junked EDI as its electronic document platform in favour of XML because of XML's superior simplicity and flexibility. "If you go to the average hospital billing clerk and start talking EDI, he wonders what you are talking about," says King. With XML, "you just sit down and talk about what data you want to exchange".

The business case for Thelma rests on a cost-reduction base with ROI of between five and 40 times the cost of a transaction, he says.

Thelma interfaces with a hospital's finance management system and charges 50 cents per transaction to transfer a patient bill to a health fund claims-assessing system. The transaction charges must be seen against the $33-$45 dollars in hospital clerical costs that each bill generates, says King.

Since its commercial launch last May, Thelma has focused more on signing up health funds than hospitals. Besides AHMG, it recently won a three-year contract from Australian Unity, one of the larger private health insurers, and is "well advanced" in discussions with three others, according to King.

Australian Unity's general manager of health care, Peter Kerestes, said he expects internal efficiencies provided by Thelma to improve the business's bottom line.

One of Thelma's advantages is that it allows Australian Unity to retain control of member information in its own system, a vital factor in preserving confidentiality requirements.

Thelma recently began marketing itself directly to private hospitals and King says it is on track to fulfil a business plan that calls for it to break even by mid-2002.

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