Thursday, February 27, 2014

Medical Coding and XBRL

by: Michael Castro, XBRL Production Manager
CompSci Resources, LLC

The world of healthcare has many complexities and nuances. At the center of much of this is information, and more information than most industries combined. In part, medical professionals collect and analyze data as it pertains to diagnosing symptoms; sharing new discoveries, progress with methodologies, developing trends; and costs.

In practice, healthcare relies largely on the efficient storage, tracking, and accessibility of information and data. That begs the question of why the collection, dissemination and analysis of health-related information is so cumbersome.

At a basic level, medical coding involves transforming descriptions of medical diagnoses and procedures into universal medical code numbers. These medical codes are then used for a diverse range of activities such as:

  • Data and statistics pertaining to medical conditions  
  • Surveillance of epidemic or pandemic outbreaks
  • Billing for services rendered
  • Determination of insurance premiums

Medical coding was designed to relieve some of the inefficiencies that the healthcare industry posed, and as such it was adopted by the World Health Organization (WHO) to help standardize healthcare across the globe. That international standard, “a medical classification list by the WHO” is now known as International Statistical Classification of Diseases and Related Health Problems”, or ICD. Currently the tenth revision of the standard is in use, ICD-10.

However its implementation thus far has not satisfied these goals. As hospitals’ Information Technology (IT) departments have scrambled to implement ICD-10, the question lingers: could there be a more effective way?

The answer could be eXtensible Business Reporting Language, or XBRL. David vun Kannon highlights this in his blog Healthcare XBRL: the Language of Concepts, as he outlines how ICD-10 would work as an XBRL Taxonomy.

With burgeoning costs, along with a growing number of new reforms hitting the industry, now is the time for the healthcare industry to move to an automated and standardized system for data storage and retrieval. With XBRL data, information can be stored in a central database, and be easily accessed, utilized and analyzed.

By using this data, healthcare professionals can reduce administrative costs by largely automating the process, which could also help drive down healthcare costs in general.

Another major benefit cited by commentators, should the healthcare industry adopt XBRL, would be the ability to observe health trends and epidemics in real time. Health organizations can track an increase in specific symptoms and more rapidly deploy services to prevent epidemics. XBRL data can also be used to more accurately determine flu strains, as well as the number of vaccinations to produce.

The medical community has a lot to gain from using XBRL. As healthcare companies currently race to implement ICD-10, it may be time to adopt a new, stable, and “experienced” solution. XBRL would fit that billing, as a standard that already has a precedent in corporate financial data.