Executive summary

Integrated healthcare is an emerging approach to care delivery designed to improve quality of care, reduce overall costs, and enable payers and providers to share in the corresponding savings. It encompasses a number of new care-delivery models, all featuring some form of payment tied to both cost and quality outcomes. One recent research report has suggested that the migration to these new models could lead to a trillion dollars in savings in the United States healthcare industry over the next decade.1 And while the industry is clearly moving in this direction, the administrative needs are daunting, as are the implications to processing healthcare payments. As healthcare organizations evolve into this new model, payers and providers alike will need to address the workflow and business process implications of the new transaction models.

Healthcare costs have been escalating for years under the traditional fee-for-service (FFS) model. In the current state, a single acute care episode, such as a joint replacement or heart surgery, can yield dozens or even hundreds of claims and associated payments between the various provider organizations and the patient's health plan. In response to declining FFS reimbursement rates, the industry is finding new ways to "bend the cost curve." As part of this transition to integrated healthcare, a new transaction model is emerging alongside traditional FFS, where integrated providers receive lump-sum payments for episodic care.