Online Health Care Initiatives on the Rise

In an effort to lower costs and improve relationships with their customers, a growing number of health insurers are developing initiatives that allow members to request referrals, check eligibility and update enrollments online.

Users and analysts said that such electronic health services should save health firms time and money by reducing call center volume. That's critical, given that some 15% of health plan revenues are siphoned off to pay for administrative costs.

Getting there is the tricky part: Challenges for health care players include grappling with legacy systems and convincing doctors to go online.

Cost-Cutting Measures

Sierra Health Services Inc. in Las Vegas is piloting an Internet health care portal among a dozen groups, including physician practices, employers and insurance brokers, according to CIO Bob Schaich. The TriZetto Group Inc. in Newport Beach, Calif., developed the application that enables members to enroll in health plans and select a primary care physician online.

Following the pilot phase, expected to be completed later this month, Sierra plans to extend the services to 350,000 members as well as additional physicians and employer groups. By then, physicians will be able to verify patient eligibility and submit referrals, and employers will be able to monitor enrollment, Schaich said. Sierra's members are located throughout Nevada, Arizona, Texas and Colorado.

Sierra expects the Internet portal to cut its 1.6 million annual support calls by 20%. Based on health industry averages, which place call center support costs at $3 per call, that would save Sierra almost $1 million per year, said Schaich.

Sierra also hopes to improve service levels by offering members the flexibility to receive information when it's convenient for them, said Schaich. Early next year, Sierra expects to add consumer health information to its Web site,

Just as the banking industry has improved its customer service by offering account access online, the health insurance industry is recognizing the need to offer the same type of capabilities, said Doug Johnston, an analyst at Forrester Research Inc. in Cambridge, Mass. As employers grumble about rising health maintenance organization costs, one way for health plans to reduce costs is to improve administrative efficiencies through the use of Internet technologies, he said.

But as more health plans warm up to online health care services, challenges remain. Many plans have legacy systems that are "not developed to support online queries from thousands of users," said Johnston.

Meanwhile, less than 30% of physician's offices nationwide are connected to the Internet, said Mark Anderson, a vice president at Stamford, Conn.-based Meta Group Inc. and a former hospital CIO.

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