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A bitter pill: Culture: Not what the doctor ordered

The grand ambitions of online health companies have been stymied by offline competition, the New Economy bust, opposition by physicians and daunting technological obstacles.


    Culture: Not what the doctor ordered

    For all its cutting-edge diagnostic and surgical technologies, the medical field remains largely in the dark ages when it comes to processing claims.

    Despite widespread complaints about HMO-mandated administrative chores, resistance to new claims-management technology is endemic and entrenched in the field, according to physicians, health analysts and executives. Executives at Net-based companies who promise to provide such technologies complain of the oppressive struggle to change physicians' behavior.

    Most doctors say they have little time to learn new administrative tricks when it is difficult enough keeping up with scientific breakthroughs in their specialties. But others attribute their stubbornness more to simple inertia and a discomfort with new technology among older physicians.

    "Doctors are people who cling to their own patterns and routines," said Healthcare Technology Network's David Main. "Getting doctors together to do anything is like herding cats. The barriers are economic, force of habit, and some of it is age."

    Of the estimated 30 billion claims processed per year by physicians' offices, hospitals, pharmacies and the insurance companies, industry executives and analysts note that only about 5 billion are conducted electronically. Of those, the vast majority are processed through antiquated and high-maintenance EDI systems despite nearly universal claims of lower costs in doing business over the Internet.

    Take the case of Dr. Mark Michael and his Cincinnati, Ohio-based allergy and asthma practice. He has been using software made by Lytec Systems for the past decade, sending electronic claims over a closed EDI network. Although his interest is piqued by the many promises of lower expense and greater efficiency on the Net, he doesn't feel compelled to do anything differently.

    "I have been using the same software since it came out, and I am happy with it," Michael said. "If you tell me I need to use new software to get to the Internet, I don't think I would switch."

    A recent study by the American Medical Association reinforces those sentiments. Only 8 percent of physicians surveyed said they used the Web to process their health insurance claims. At the same time, however, doctors have dramatically increased their use of technology--75 percent report using a computer and 70 percent use the Internet--for medical research and access to information on sites such as Medline, WebMD and Medscape.

    "The resistance is not resistance to EDI or the Internet," MedUnite's David Cox said. "It is just that physicians don't yet see any advantages over what they were doing before--that's the big hang-up."

    The passing of time offers some hope for online technology in the profession. As older doctors retire and are succeeded by younger, more computer-savvy physicians, Net-based claims services may see growing popularity.

    The AMA study reinforces anecdotal indications that age is a major factor in how quickly the Internet is being assimilated as a medical and administrative tool for health professionals. The study found that 91 percent of physicians 40 years of age or younger use a computer; among those 60 or older, however, only 46 percent use a PC.

    The larger online medical companies have been buying more traditional EDI network technologies as an interim measure in response to the dual barriers of physician resistance and the usage of outdated technology, hoping to ease the transition of physicians to the Internet over the long term. WebMD acquired Envoy last year, and MedUnite acquired the claims processing business of NDCHealth this summer.

    "If a physician wants to use only EDI, that is fine. We will try to move them to the additional robustness of real-time, Web-enabled functionality," Cigna's Marjorie O'Malley said. "We will work with physicians at whatever rate they want and when they are ready."

    That may be the most progress online medical companies can hope for at this time. On the bright side, though, the doctors who do learn to use processing technologies often become loyal fans--once they finally agree to try them.

    "The speed of getting your money is great! Really, I would never go back to paper claims," Michael said of his EDI system. "Compared to the paper claim we used to send, it is like having a luxury car vs. a horse and buggy." 


    The companies:


    TriZetto Group


    The consortia:


    Aetna U.S. Healthcare


    Cigna HealthCare

    Health Net

    PacifiCare Health Systems

    WellPoint Health Networks

    The observers:

    American Medical Association

    The Health Insurance Portability and Accountability Act of 1996 (HIPAA) page
    Health Care Financing Administration