Pharmacy benefit manager MediKredit has wasted no time in taking advantage of the emerging technology for business-to-business (B2B) e-commerce. In 1998, when the present CEO, Wimpie du Plessis, took the reins, the company was a thoroughly paper-based organisation, where information technology (IT) was merely an enabler. Today, it is a virtually paperless technology company that operates one of the most sophisticated and effective systems to offer online, real-time processing of medical aid claims to pharmacies.
"There`s nothing quite like it in the market," says Du Plessis. "When we showed our product to the likes of KPMG, their comment was that while everyone seemed to be talking about B2B e-commerce, few were actually doing it. HealthNet ST was the first system they`d seen in South Africa that could be described as a working B2B solution."
Leonard Weincier, customer relationship manager at Datrix Solutions, which developed the software interface used in the pharmacies, says that the existing hardware system, using Natech terminals - reminiscent of first-generation electronic credit card machines - had become unreliable, costly, and overwhelmed by the transaction volumes HealthNet generated.
He explains what the system does: "When a pharmacist enters a script onto his computer, the HealthNet ST software we wrote picks up the transaction. It is sent to MediKredit, where the transaction is verified, and subjected to various rules, depending on the patient and the medical funding scheme in question. The result is that with a turnaround time of about 11 seconds, the pharmacist will know how much of the script will be covered by the patient`s medical aid and the reasons for rejection (if any). He can then confidently bill the customer accordingly."
Creating value at both ends of the network
While the process sounds very simple, Du Plessis points out that it is a complex system. "We have two sets of customers, both of which have certain expectations of us," she says. "For the healthcare providers, our solution significantly reduces their risk, and improves the level of service they can offer to their customers. For the healthcare funders, we apply all of their business rules, exceptions and authorisation processes, and furnish them at the end of it all with a completed, validated financial transaction."
Du Plessis emphasises that while there are several companies that provide simple hubs, carrying data between healthcare providers and healthcare funders, MediKredit is alone in offering the value-added service of fully processing the claims it handles.
"This system provides us with a platform from which we can grow our business," she says. "HealthNet ST currently provides a service to a comparatively small part of the overall healthcare industry - those being some of the more IT-capable healthcare funding companies, and over 95% of pharmacies. We`re starting to roll out the system to the hospital and doctor markets, and in the future, we`d imagine rolling out similar solutions to optometrists, dentists, and other providers of healthcare-related services. Since we own the front-end software, we are in a unique position where we can use HealthNet ST as a foundation for offering more real-time information and communication between various players in the healthcare industy."
Superior technology
Not surprisingly, the "ST" in HealthNet ST is an acronym for Superior Technology. The old system was faced with a lot of customer antagonism, because of its slow speed and frequent unreliability.
"Often, pharmacists would have to tell customers, `Sorry, but we can`t contact your medical aid. You`ll have to pay cash,`" relates Weincier. "Needless to say, this caused much frustration and embarrassment. There used to be a firmware reset technique for the old hardware units that involved a paperclip and a short-circuit on one of the ports. While HealthNet was providing a useful services, people didn`t like the interface at all."
MediKredit approached Datrix Solutions with the problem. "We had a number of attempts at creating a software solution," says Du Plessis, "all of which failed. In Datrix, we saw a company that understood the environment in which we operate, had good project management skills, and showed the flexibility and creativity that matched our own culture."
Weincier explains that the solution was not without its challenges. "We had to, without much existing documentation beyond the manuals, figure out what these Natech terminals did. Our intention was to replace these `black boxes` with a more flexible, more reliable and ultimately more functional software system."
The benefits of a software solution are many. Software can more readily be adapted to changing needs. It provides better transaction logging, better integration with pharmacists existing software systems, much improved reliability, as well as remote updating and diagnostics. In addition, MediKredit has been able to significantly reduce its costs in holding spares and employing support staff.
In order to satisfy the requirements of the over 2 500 pharmacies that make use of HealthNet ST, Datrix had to write the solution for five different operating systems. "We first developed a Linux version. Then followed versions for SCO Unix, Win32 (for Windows 95/98/NT systems), and DOS. We even had to find programmers competent in Xenix to do a version for Microsoft`s old version of Unix for the desktop.
Weincier relates: "We had difficulty finding skilled DOS programmers who were not by now safely ensconced in middle management positions. And finding compilers for Xenix - which is not supported by Microsoft at all anymore - was also tricky."
Notwithstanding these hurdles, Datrix managed to complete the project - from the specification of business requirements through running a fully-working test bed to the final implementation - in not much more than six months.
"We are very proud of what we`ve achieved," says Du Plessis. "We`ve taken this company from a completely paper-based company at the end of 1998, and turned it into a paperless B2B e-commerce organisation. Throughout this process, Datrix has been closely involved as a business partner - a relationship that will continue for the foreseeable future."
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