Eric Demers, CEO of Madaket Health
There’s no better illustration of the healthcare system’s data problems than this: 80% of entries in the nation’s five largest health plans were inaccurate as recently as last year. With a majority of patients relying on their health plan’s provider directory to select a physician, it’s not hyperbole to say incorrect provider data is dragging the entire industry down.
How can value-based care be realized when patients can’t find the provider information they need? Something as small as an incorrect address can cause patients to miss out on vital treatment. Every industry is data-driven now, but nowhere else is it so crucial as healthcare, where it can be the difference between life and death. Despite this, providers still struggle to exchange data and update directories in real-time, which means they cannot ensure patients will access the high-quality care they deserve.
Prioritizing Clean Data
Provider directory management can only go so far if the information contained within it is inaccurate. With at least 20 percent of physicians changing practices, hospitals, or affiliations annually, the information in these databases is constantly changing. A provider’s location, contact information, and network affiliations have to be constantly updated; administrative work that currently costs practices nearly $3 billion each year.
Plus, the lack of data standardization requirements in healthcare further complicates data exchange. Medical practices interact with dozens of health plans, and each one takes its own approach to sharing directory information. (i.e., fax, email, software platforms, and phone calls). It’s messy and inefficient and typically results in members being misassigned. When a health plan mistakenly lists a provider as in-network when they’re not, the patient faces unnecessary out-of-pocket costs or denied claims. A surprise bill is a surefire way to keep patients from seeking care down the line.
The True Cost of Dirty Data
Bad healthcare data already costs the industry over $3 trillion. When patients lose money, insurers lose members, and healthcare providers lose patients. Public funds are at risk, too. Our team found that Medicaid members who are misassigned due to bad provider data for a single health system in one state lead to around $55 million being unnecessarily spent over a month.
If value-based care hinges on being able to give the right attention to the right patient at the right time, provider directory management as it stands today is untenable. The goal is to reward providers who deliver quality, cost-effective care, but that’s harder than ever, given the state of provider directories.
When provider directories are inaccurate, patients can end up with the wrong healthcare providers or incur out-of-network charges, which increases expenses and leads to rejected claims. The root cause of these issues often lies in the mismanagement of provider data, which is frequently handled through repetitive, manual, and error-prone processes. Currently, these denied claims account for the overwhelming majority of missed revenue for healthcare providers.
Value-based care models emphasize patient outcomes, but accurate data is needed to coordinate care properly across different locations, specialties, and networks. This is especially true for patients in need of chronic disease management. These patients rely most on quality care coordination and don’t have the luxury of facing lapses in the care continuum caused by provider data issues. Every missed appointment or delay in treatment affects the patient’s health outcomes and drives up healthcare costs due to complications and emergency interventions.
Improve Data, Improve Outcomes
Precise, up-to-date provider data is fundamental to achieving better clinical and financial outcomes in healthcare. Reliable, up-to-date provider information ensures that patients are accurately matched with the appropriate healthcare professionals, which is especially important for those with complex or chronic conditions requiring coordinated care across multiple providers.
Accurate provider data minimizes the risks of missed appointments, duplicate tests, and treatment delays by ensuring that referrals are directed to the correct specialists and that follow-up care is managed efficiently. Automated systems that update provider data in real-time eliminate the need for manual data entry, allowing healthcare staff to focus more on patient care rather than administrative tasks. This leads to better clinical outcomes and higher patient satisfaction.
Accurate provider data minimizes the risks of missed appointments, duplicate tests, and treatment delays by ensuring that referrals are directed to the correct specialists and that follow-up care is managed efficiently. Automated systems that update provider data in real-time eliminate the need for manual data entry, allowing healthcare staff to focus more on patient care rather than administrative tasks. This leads to better clinical outcomes and higher patient satisfaction.
From a financial standpoint, precise data management reduces administrative overhead and cuts costs related to incorrect billing, denied claims, and out-of-network charges. Additionally, accurate provider data helps healthcare organizations comply with regulations like the No Surprises Act, which mandates timely updates to provider directories. Compliance prevents costly fines and builds trust with patients and other stakeholders, fostering a more stable and sustainable healthcare environment.
Addressing the challenges of provider data management requires implementing robust data governance frameworks and collaboration between health plans and providers. By leveraging modern solutions that standardize and streamline data management, healthcare organizations can save significant administrative costs and ensure that patient health is prioritized. The research makes it clear that automated provider data management platforms save providers an average of $1,250 in administrative costs per month and the US more than $1.1 billion annually.
The Data-Driven Future of Value-Based Care
The medical industry has the tools to make accurate management of provider data the standard. All parties should be on board as it’s clear how important quality data is for improving both clinical and financial outcomes under value-based care models. Realizing this goal requires buy-in and mutual investment in technology from providers and networks alike.
The alternative is for healthcare to continue hemorrhaging money, whether that’s because of administrative oversights, regulatory penalties, or losing dissatisfied patients. Agnostic, technology-enabled platforms can already provide accurate, real-time updates and synchronize the exchange of provider information between payers and providers. The administrative headaches of directory management should be a thing of the past.
By stressing the value of data integrity, providers and health plans can implement value-based care models seamlessly and build a system where patients receive the care they need, when they need it, without unnecessary delays or costs.
About Eric Demers
Eric Demers is the CEO Madaket Health. He believes we can transform healthcare delivery through the power of data and interoperability. With more than 25 years of global healthcare experience, Eric has built and scaled leading technology and service companies, from early stage to Fortune 100. He is highly sought-after for speaking and consulting on international health, having advised global entities and governments on critical issues facing healthcare. A growth-minded leader, Eric has founded three companies and exited two. Eric previously served in strategy-focused executive roles at IBM, Accreon, MEDecision and Orion Health.
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