- Providence St. Joseph Health (PSJH), an integrated payer-provider system, has announced the acquisition of Lumedic, a blockchain company serving the revenue cycle management market.
The purchase will turn PSJH into the first payer-provider network to leverage blockchain at scale to improve the interoperability of data between financial and clinical entities.
“New technologies like blockchain, artificial intelligence, and machine learning give us an opportunity to view the complexities of today's health systems through a different lens,” said Venkat Bhamidipati, Providence St. Joseph Health’s chief financial officer.
“Our acquisition of Lumedic's innovative platform is yet another example of how we are pursuing all avenues of transformation, allowing us to redirect unnecessary spend towards either patient savings or care.”
The organization, which is the third-largest non-profit health system in the country, plans to use Lumedic’s blockchain skills to reduce inefficiencies and architect a trusted, end-to-end revenue cycle management (RCM) platform.
Administrative inefficiencies and manual RCM processes were responsible for $500 billion in waste in 2018 alone, the health system says, citing a McKinsey & Company analysis.
“Providence St. Joseph Health has a long history of innovation and this is an opportunity to ease the transition to patient-driven interoperability while improving operations and diversifying revenue streams,” said Mike Butler, president of operations and strategy at PSJH.
“The Lumedic platform will reduce administrative burden and enable resources to shift to improved patient care, more patient-centric billing experiences, and lower costs.”
At the moment, Change Healthcare is probably the best-known user of blockchain in the payment transaction space.
The company, which handles $2 trillion in claims processing transactions per year, launched a blockchain solution for payers and providers in 2017, and started running blockchain in parallel with its traditional processing systems in 2018.
PSJH’s acquisition, however, is among the first to connect the payer and provider ecosystems through blockchain-based tools.
The health system’s announcement follows quickly on the heels of news that PSJH is spinning off a separate population health management technology company called Ayin Health Solutions.
“PSJH, like many health systems, is transforming our business model to ensure we are meeting the needs of our communities, addressing the evolving healthcare industry and sustaining our mission of providing compassionate care for all,” said Rhonda Medows, MD, PSJH’s president of population health and chief executive officer of Ayin Health Solutions.
“Providers and payers have the opportunity to align at both the financial and clinical levels – two levers that really have the ability to change our industry – and all in service to providing better care to those we serve,” she said to HealthITAnalytics.com.
Medows also expressed her enthusiasm for the Lumedic purchase in a press release from the health system.
“Providence St. Joseph Health welcomes the Lumedic team and the focus on substantially improving the coordination of financial transactions between payers and providers,” she said.
“By disrupting these often cumbersome processes ourselves, we strive to lower administrative costs for both parties while getting deeper insight into the financial experience of patients and the ways we can simplify the process for them.”