Patient Data Network Helps Hospitals, Physicians and Insurers Reduce Administrative Expenses

The New England Healthcare EDI (Electronic Data Interchange) Network, a "relatively simple computer interface" that allows health insurers, hospitals and physicians to share patient data, has saved its members $10 million in annual administrative expenses, the Los Angeles Times. NEHEN, formed in 1997, allows network members to make patient data accessible to one another directly from their own computers by using a "data translator" rather than establishing a large, common database of patient information. The Times explains that the data translator lets each NEHEN hospital, clinic, doctor's office and insurance company "speak the lingua franca" of HIPAA while using the software of their choice.

NEHEN has already helped 12 Boston-area health organizations save money. For example, CareGroup HealthCare Systems purchased the NEHEN translation software for $250,000, and has saved $10 million as a result. In addition, two of Boston's largest hospitals -- Massachusetts General Hospital and Brigham and Women's Hospital -- saved about $8 million last year by participating in the network. The Times reports that after the entire NEHEN system is up and running "sometime next year," the consortium "expects to save more than $66 million per year."

In addition to cost savings, network participants say the program has improved customer service, the Times reports. NEHEN continues expanding its services. In January, the program began allowing providers to check the status of insurance payments, and plans to launch modules that will allow providers to "ask insurers how much they will pay for specific services and then send bills through the network" (Kaplan, Los Angeles Times, 4/3).