Aussie health e-portal nears "critical mass" - News - Business

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This story was printed from ZDNet Australia.
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Aussie health e-portal nears "critical mass"

By James Pearce, ZDNet Australia
October 09, 2002
URL: http://www.zdnet.com.au/news/business/soa/Aussie-health-e-portal-nears-critical-mass-/0,139023166,120268931,00.htm

THELMA, the electronic exchange for the health industry, claims it is nearing "critical mass" following the sign up of NIB, the sixth largest health fund in Australia.

"We're in the process of connecting the industry," Tim Murray, managing director of ICSGlobal - the owner of THELMA, the Transactional Health Exchange Linking Multiple Applications - told ZDNet Australia. "It's like the phone network, until you've got a lot of people connected it's not much use to anyone."

THELMA went live in May 2001, but the industry has been slow to take it up, with the addition of NIB bringing the membership of private health funds to 45 percent. Far fewer hospitals have signed up, with only 10 percent subscribing to the system. "It's a big change, so it's going to be slow," said Murray.

Murray said the health fund participation level had reached critical mass, and the health funds were encouraging the hospitals to join up. He expects to be cash flow positive 'sometime in 2003'. "Transaction volume is growing," he said. "As the big funds come on that's going to really boost that."

THELMA is a system that allows the health industry to do its transaction electronically rather than rely on paper invoices and responses, with one benefit being a lower cost.

"For a hospital to produce a claim for a health fund, industry levels is around AU$55, THELMA will shave AU$10-15 off that," said Murray. "But the big benefit is that you can't lose the claims."

According to Murray, hospitals face a big problem with cash flow and getting paid on time, whereas health funds have a problem with 'claims leakage'. This is where they pay a claim multiple times, overpay a claim or where a claim is fraudulent.

"They used to think the level was around five percent, now they think it's about 10-15 percent of total benefit payouts," explained Murray. "So for a health fund paying out AU$1 billion a year, that's about AU$100 million."