Eric Demers
Last year, researchers looked at the directories of the nation’s five largest health plans and found that four out of five entries were inaccurate. This is more than a minor inconvenience. It’s a financial blackhole for all stakeholders and a disruption, if not a complete obstruction, to patient care.
Over 50% of all patients use a health plan’s provider directory to select a physician, yet persistently incorrect provider data undermines the entire system. Value-based care puts patient health and well-being front and center, but when patients can’t find the provider information they need, whether it’s a phone number or address, it causes them to delay or forgo care altogether, face unexpected medical bills, and struggle to find the appropriate healthcare services.
Healthcare is a data-driven industry, but it’s held together by incompatible, siloed data systems. Providers and payers need the ability to exchange data and update directories in real time; otherwise, they cannot ensure patients will access the high-quality care they deserve. Automation isn’t just about decreasing administrative spending and improving operational efficiency, although it does that in spades. It helps clinicians provide high-quality care by correctly matching patients with the appropriate providers.
The scope of the problem
Inaccurate provider data leads to a cascade of issues that affect everyone in the healthcare landscape. To understand why health plans and providers need a way to streamline provider directory management, let’s look at why they are so complicated and expensive to maintain.
The first issue is data quality. Provider details such as location, specialties, contact information, and network affiliations are subject to frequent changes. Almost a third of physicians switch practices, hospitals, or affiliations yearly, meaning provider data is constantly in flux. Manually updating provider directories is incredibly resource-intensive and costs practices nearly $3 billion each year. Next, there are no data standardization requirements in healthcare. Medical practices interact with dozens of health plans, each with its own method of sharing directory information. (i.e. fax, email, software platforms, and phone calls) that complicates data exchange.
It should come as no surprise then that this overly complicated system often misassigns members to incorrect providers. For example, if a health plan mistakenly lists a provider as in-network when they’re not, the patient who mistakenly sees that doctor is the one who gets hit with the bill. The unnecessary out-of-pocket costs and, in some cases, denied claims, drive member dissatisfaction and can cause them to delay care in the future.
It’s not just the patients who endure the frustrations caused by poor data management either. With a shortage of healthcare professionals and increasing demands on existing staff, inaccurate data adds to the administrative workload, diverting time and resources away from patient care. A study published in the Journal of General Internal Medicine found that half of healthcare workers, including 47 percent of physicians, met the criteria for burnout.
Financial impact
There is no one reason bad data is so detrimental to the healthcare industry. It causes health plans to lose patients, patients to spend too much money, and prevents providers from delivering high-quality care. As a result, the toll of bad data costs over $3 trillion, a stunning figure that could be quickly diminished if all payers and providers banded together to streamline data exchange and maintain up-to-date provider directories.
Value-based care and provider data accuracy
Value-based care emphasizes the importance of directing the right attention to the right patient at the right time. It can also increase profits for providers who take on an increased responsibility for patient outcomes by rewarding them for delivering quality, cost-effective care. Accurate and timely provider data is necessary, but as we’ve seen, the poor state of provider directories poses significant challenges to successfully implementing value-based models.
Revenue leakage
When provider directories contain incorrect information, patients may be assigned to the wrong providers or receive out-of-network care, leading to higher costs and denied claims. The mismanagement of provider data—often the result of repetitive, manual, error-prone processes—contributes heavily to claims processing errors, especially denials, adding nearly $17 billion annually in unnecessary healthcare costs. Today, denied claims make up 90% of providers’ total missed revenue opportunities.
Additionally, patients can dispute bills that result from poor data quality and switch health plans if they deem their network is responsible. Almost a third of patients who receive surprise bills note errors in their health plan’s provider directory.
Care coordination
The most important consideration here is not lost revenue but patient outcomes. Under value-based care models, providers are paid for results, not for each patient they treat. However, even the most accountable doctors and healthcare organizations require accurate data to effectively coordinate care across different locations, specialties, and networks. Errors in this data can result in miscommunications, delays, and fragmented care with a tangible human cost.
Chronic disease management
Patients with chronic illnesses, such as chronic kidney disease (CKD) and diabetes, suffer the most from the lapses in the care continuum that occur from provider data issues. They need regular, coordinated care from various specialists. Still, inaccurate provider information can lead to missed appointments and delays in treatment that affect the patient’s health outcomes and increase healthcare costs due to complications and emergency interventions.
Improving quality outcomes
Precise, up-to-date provider data is fundamental to achieving better clinical and financial outcomes in healthcare. When provider directories are reliable, patients can be correctly matched with the appropriate healthcare professionals, which is particularly crucial for patients with complex or chronic conditions who require coordinated efforts from multiple healthcare providers.
Accurate data ensures that referrals are made to the correct specialists, appointments are scheduled without errors, and follow-up care is appropriately managed. This reduces the likelihood of missed appointments, duplicate tests, and treatment delays, all of which can compromise patient health. With systems that guarantee the accuracy of provider information through automated, real-time updates, providers can improve the quality of care, leading to better health outcomes and increased patient satisfaction.
From a financial perspective, efficient data management reduces administrative overhead while minimizing the costs associated with incorrect billing, denied claims, and out-of-network charges.
Automated systems that update and verify provider data in real-time eliminate the need for burdensome manual data entry and corrections, allowing healthcare staff to focus more on patient care rather than administrative tasks.
Furthermore, accurate provider data supports compliance with regulations like the No Surprises Act, which mandates timely and precise updates to provider directories. Compliance with these regulations avoids costly fines and builds trust with patients and other stakeholders, promoting a more stable and sustainable healthcare environment.
Ensuring provider roster alignment
The process of maintaining provider directories has not kept up with the advancement of technology that other industries use for managing data. In other fields, if a company doesn’t adapt and adopt modern solutions, it loses a competitive edge and declines in profits. The same is true in healthcare, except in our industry, patient health also suffers as a result.
Reckoning with provider data management challenges begins by implementing robust data governance frameworks throughout the industry. We need clear policies and procedures that ensure data availability, integrity, security, and usability of data. Next, health plans and providers must come together and share the responsibility of provider data management. They can leverage existing solutions that standardize provider data and enable credentialing with multiple health plans from a single platform. Reports show that these provider data management platforms save providers an average of $1,250 in administrative costs per month and the US more than $1.1 billion annually.
Conclusion
The accurate management of provider data is essential for improving both clinical and financial outcomes under value-based care models. It ensures patients receive high-quality, coordinated care and helps healthcare organizations operate more efficiently, ultimately leading to better health outcomes and significant cost savings.
It’s in the interest of payers and providers to prioritize accurate provider data, but achieving data accuracy will require collaboration and mutual investment in technology. The healthcare industry is bleeding money from administrative oversights, and mistakes hiding in provider directories are one of the biggest culprits. Leveraging agnostic, technology-enabled platforms that can provide accurate, real-time updates and synchronization of provider information between payers and providers reduces administrative burdens, enhances data integrity, and supports the seamless implementation of value-based care models.
Precise provider data is the backbone of an efficient, value-based care system. It helps all parties work seamlessly towards the common goal of improved healthcare delivery, which we should all champion.
Photo: Filograph, Getty Images
Eric Demers is the CEO of Madaket Health. He believes we can transform healthcare delivery through the power of data and interoperability. With more than 25 years of global healthcare experience, Eric has built and scaled leading technology and service companies, from early stage to Fortune 100. He is highly sought-after for speaking and consulting on international health, having advised global entities and governments on critical issues facing healthcare. A growth-minded leader, Eric has founded three companies and exited two. Eric previously served in strategy-focused executive roles at IBM, Accreon, MEDecision and Orion Health. He is a graduate of Brandeis University and The George Washington University School of Medicine and Health Sciences.
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