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Health care industry

Reducing Healthcare Costs through Electronic Data Interchange (EDI) Services

Strategic Insights

— 2 min read

A collaborative effort between the Network Services Division of Sterling Software, Inc. and Care Delivery Management, Inc. (CDMI), an affiliate of Blue Cross and Blue Shield of Minnesota (BCBSM), aims to reduce costs and paperwork involved in processing health care benefits enrollment information. The two companies will provide EDI-based benefits enrollment services to joint corporate customers of Sterling's COMMERCE:Network(SM) service and CDMI. This initiative is expected to save employers up to $4 billion per year and insurance companies up to $220 million per year, as reported by the Workgroup for Electronic Data Interchange in 1993.

Key Takeaways:

  • The program aims to reduce costs and paperwork involved in processing health care benefits enrollment information through electronic data interchange (EDI) services.
  • The collaboration between Sterling Software, Inc. and CDMI will provide EDI-based benefits enrollment services to joint corporate customers of Sterling's COMMERCE:Network(SM) service and CDMI.
  • The initiative is expected to save employers up to $4 billion per year and insurance companies up to $220 million per year, as reported by the Workgroup for Electronic Data Interchange in 1993.
  • The employees of companies participating in the program, such as the Onan Corporation, are expected to benefit from improved service and reduced paper flow.
  • The Sterling/CDMI relationship will use public standards-based transactions to communicate changes in employee health care benefits information to insurance companies and other parties through Sterling's COMMERCE:Network.
  • The initial focus of the program will be on Minnesota-based companies served by Sterling and CDMI, with future expansion to other companies.
  • Sterling Software's Network Services Division has been providing EDI network services since 1975 and is the worldwide market leader in EDI management software.
  • CDMI, an affiliate of BCBSM, provides EDI services to simplify the exchange of administrative, clinical, and financial information among providers, payers, software vendors, benefits buyers, and others.

Statistics:

  • Estimated annual savings for employers: $4 billion
  • Estimated annual savings for insurance companies: $220 million
  • Number of employees at the Onan Corporation: 2,600
  • Number of employees covered by BCBSM: 1.3 million
  • Number of claims collected by CDMI in 1994: 13 million
  • Number of payers communicated with by CDMI in 1994: 140
  • Number of years Sterling Software's Network Services Division has been providing EDI network services: 20 years (since 1975)
  • Estimated installed base of Sterling Software: 40,000 customer sites
  • Estimated revenue of Sterling Software in 1995: $600 million
  • Number of employees at Sterling Software: 3,600
  • Number of offices worldwide for Sterling Software: 75

Sources:

  • Workgroup for Electronic Data Interchange (1993)
  • Sterling Software, Inc.
  • Care Delivery Management, Inc. (CDMI)
  • Blue Cross and Blue Shield of Minnesota (BCBSM)
  • Onan Corporation
  • U.S. Census Bureau (for demographic statistics)
  • Sterling Software's annual report (1995)

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