Have you heard of Medical Banking? No, it’s not an ATM near your hospital bed (although it technically would be possible). “Medical Banking” refers to the integration of banking IT infrastructure with health care financial operations. It was a term coined by John Casillas who initiated the project in 2001 to identify areas of convergence between banking and health care. HIMSS (Health Information and Management Systems Society) acquired the Medical Banking Project in 2009. John runs the project for HIMSS.
There are many ways that banks can work with health care organizations to reduce costs and simplify health care delivery. They can provide treasury management services, commercial lending, credit card processing, and safeguarding of medical records.
One key area for banks is providing the secure “treasury” (lockbox, clearinghouse) services between medical service Providers (doctors, hospitals), and Payers (insurance companies). Banks can speed medical claims using electronic remittance and move dollars more quickly through the system. Why banks? They have spent decades and collectively, billions of dollars developing secure financial transaction systems, and it gives them a way to create a new revenue stream from their technology investments. Health care organizations benefit because they can receive money faster from Payers; today many organizations still process paper claims that are snail-mailed and claims processing can take months. With new federal health care legislation, health care organizations (Providers and Payers alike) are being pressured to automate and digitize. Banks already have the infrastructure to do that, making them natural strategic partners for health care.
Many banks small and large are beginning to offer medical banking services, including treasury management, merchant processing, sweep accounts, and medical financing. Technology companies are developing specialized software, hardware, and imaging systems that fit the security and performance needs of both the banking and health care entities involved. Federal and state governments continue to create new regulations and mandates to reduce costs and force the technological changes. All indications are that this promises to be a new market for the foreseeable future.
What is your opinion on this emerging market?