What You Don't Know About Healthcare Transactions and Clearinghouses Could Cost You, With Zack Kanter

Healthcare Transactions Cost 1,000 Times More Than They Should — Here's Why Clearinghouses Are Part of the Problem

Sending a claim through a healthcare clearinghouse costs 10 to 15 cents per transaction. Sending a thousand business emails at scale costs about 15 cents total. That is a thousand-to-one cost differential for something that healthcare has actually standardized more rigorously than most other industries — thanks to HIPAA's administrative simplification rules, which mandate X12 standard transaction formats, ICD-10 codes, CPT codes, and HCPCS codes. Logistics and retail would kill for that level of standardization. Healthcare has it and still pays 1,000 times more per transaction.

In this episode, Stacey Richter speaks with Zack Kanter, CEO and founder of Stedi — the programmable healthcare clearinghouse — about the $5–$7 billion a year sitting in healthcare transaction processing costs that should be roughly 90% lower, the days of delay baked into batch-based legacy clearinghouse architecture, and why this is fundamentally an incentives problem more than a technology problem.

WHAT YOU'LL LEARN

✅ What a clearinghouse actually does: it acts as a hub connecting all providers with all payers so that a practice doesn't have to set up separate authenticated data connections, BAAs, and field mappings with every payer — one connection routes claims, eligibility checks, claim status requests, and prior auth transactions to the right destination

✅ Why healthcare transactions cost 1,000 times more than other industries despite HIPAA standardization: the standards lower the technical complexity, but legacy batch-based systems, lack of competitive pressure, and payer incentives to maintain the float have kept the infrastructure expensive and slow

✅ Why the batch processing train-stop model adds days to every transaction: clearinghouses pick up files every 30 minutes to 12 hours, queue them for transmission, and payers receive and adjudicate on their own batch schedules — miss one train by a minute and you wait 24 hours for the next one, adding receivables days for providers and delays in clinical decisions for patients

✅ Why this is not really a technology problem: the technology to make these transactions instant and cheap already exists — what is missing is incentive to use it, because payers benefit from the float on billions of dollars held for additional days, and clearinghouses owned by payers have limited motivation to disintermediate themselves

✅ How opacity compounds the cost: when a claim goes wrong across the clearinghouse/EHR boundary, neither side can easily tell where the problem is sitting — providers call to find out whether their prior auth is approved while the request is held up somewhere in a batch queue between train stops

✅ What plan sponsors should understand about the arms race: RCM vendors on the provider side are already using programmatic clearinghouses to maximize revenue in real time; plan sponsors who do not have equally programmatic prepayment integrity programs connected to the same data streams are bringing an increasingly rusty knife to a gunfight

WHY THIS MATTERS

Every extra day in the transaction pipeline is a day a provider waits to get paid, a day a patient doesn't know whether their procedure is approved, and a day the patient may have moved or forgotten the context — reducing collection rates and potentially delaying care. Fixing the pipes does not require eliminating clinical review. It means replacing batch jobs with real-time processing for the tens of thousands of technical validation rules that should be instantaneous. The technology is not the obstacle. The incentives are.

=== LINKS ===
🔗  Show Notes with all mentioned links:  
https://cc-lnk.com/EP497

🔗  Visit Stedi:
https://www.stedi.com  

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09:47 What things are being paid for that we might not be aware we're paying for in healthcare?

12:09 Why HIPAA actually makes healthcare more standardized than other industries.

15:35 How healthcare is ahead in some ways and behind in others.

18:03 Where do the 4 to 5 days come from in healthcare transaction processing?

20:39 Why these transaction delays affect care delay.

23:14 EP482 with Preston Alexander.

23:18 EP472 with Eric Bricker, MD.

27:10 How should the process work from the time a provider clicks "validate"?

30:19 Why is the clearinghouse the right place to solve all these issues?

31:41 Why are we where we are in terms of these issues?

35:28 Why people should be looking at their clearinghouse costs.

36:59 What to know about Stedi.