Thursday, January 29, 2009

Healthcare Payments Automation and the New President

By Mark Brousseau

During his campaign for office, Barack Obama outlined a healthcare plan promising to “lower health care costs by $2,500 for a typical family by investing in health information technology, prevention and care coordination.”

The economic stimulus package currently being debated in Congress reportedly includes $20 billion for healthcare IT. The Committee on Ways & Means reportedly stated the IT funds would be used to establish standards, payment incentives and privacy protections to encourage the widespread adoption of healthcare IT.

According to a discussion draft from the House Appropriations Committee, the $20 billion is intended to “cut red tape, prevent medical mistakes, provide better care to patients and help reduce healthcare costs by billions of dollars each year by introducing cost-saving efficiencies.”

Dwayne L. McAfee, president and CEO, Payformance Corporation, believes the Obama administration will support initiatives to further automate healthcare payments. More specifically, McAfee anticipates the following:

... A continued commitment to the electronic standards first established by the HIPAA legislation of 1996. He expects that the new administration will support the final rule recently published for transition from Version 4010A1 to Version 5010 of the HIPAA Transactions and Code Sets.

... A continued emphasis on efficient delivery of appropriate healthcare services without administrative burden. McAfee expects efforts aimed at effective information exchange to further reduce administrative overhead.

... A continued commitment to build on the automation foundations in place today. McAfee expects support for accelerated adoption of electronic payments and remittance advices. Furthermore, he expects initiatives aimed at making claim settlement data visible and easily accessible.

McAfee also is optimistic that the new administration will continue support for expanded payer/provider connectivity and efficiency with regard to claim settlement communications.

What do you think? Post your comment below.

Fee to Pay by Mail?

Posted by Mark Brousseau

Some billers are taking more aggressive measures to get customers to pay bills electronically. Take a look at this article from The Beaumont Enterprise in Texas.

Jan. 11--Paying for cable television in Southeast Texas just got more expensive for some customers of Time Warner Cable.

That doesn't refer to just the bill for whatever level of service a customer might have. The act of paying for it by mail is what got more expensive.

Time Warner apparently wants to encourage its customers to pay their bill online, which means people need an Internet connection and have an established online banking capability.

If you don't, as of Jan. 1, your bills will cost 99 cents more to pay.

On the other hand, if you pay online, your bill would be 99 cents less.

"People are moving away from paper bills," said Gary Underwood, Time Warner spokesman. "It's a trend. It's not just our industry."

Jane Walker of Beaumont said she already pays online, but wants the paper statement every month to make certain she's not being charged more than she deserves.

"I pay my bills timely," she said. "For a company the size of Time Warner to charge people 99 cents to send a bill is horrendous."

Walker wrote a letter to The Enterprise in protest of Time Warner's new "Go Green" program, which is how the cable giant is framing the charge. The company said the initiative will reduce paper waste and help to "save the environment."

Walker isn't so certain of Time Warner's motives.

"I would ask them to explain to me why," she said. "They know there are people who can't say no. Isn't it enough to pay our bills timely? It makes me angry that they can do this. Isn't there anyone who oversees this?"

Time Warner enjoys something like an unregulated monopoly in many areas of Southeast Texas, unlike Entergy Texas and AT&T. Neither the electric company nor the telephone company charges customers to send pay by mail.

"Entergy has no plans to charge," spokeswoman Debi Derrick said. "We give our customers a choice. Any new charge would likely require Public Utility Commission approval."

AT&T spokesman Dan Feldstein said: "We do not charge customers who elect to have paper billing."

Wanda Luke of Port Neches said she's been paying her bills online for the last 18 months and she likes the convenience of it.

"It's worked out wonderful for me. Friends had a good level of comfort with online banking. I can look at the complete bill and I can even get more detail, like with my American Express bill," she said.

However, Luke said she didn't realize Time Warner would charge people 99 cents if they still wanted the paper bill in the mail.

"I'm thinking only about how much I can save," she said.

If all of Time Warner's customers in Southeast Texas -- numbering perhaps 100,000 -- paid the 99-cent charge, that's about $99,000 per month just to pay the bill.

Underwood said people also can pay at Time Warner's kiosks, 1420 Calder Ave., Beaumont; and 602 N. U.S. 69, Nederland. To avoid the 99-cent charge, a customer still needs online banking capability.

For those who might want another option, the Yellow Pages -- still available in print version in the free telephone book supplied by AT&T -- has plenty of listings under "satellite and cable TV equipment."

Super Bowl Predictions

By Mark Brousseau

With all of the major issues facing the payments and document automation markets (I’ll spare you the reminders), I thought it might be a good time to take a few moments to reflect on something a little less serious (for most of us): this weekend’s Super Bowl. Below is a roundup of predictions from TAWPI members on the big game. Feel free to add your own prediction and rationale below. And don’t worry: Monday I’ll be back to writing about business process improvement.

Bob Kirk, ChoicePay:
The Pittsburgh Steelers – “One for the other thumb … Super Bowl rings, that is.”

Karan, McClimans, T. Rowe Price:
The Arizona Cardinals -- "Kurt Warner has to prove that 37 is not old!"

Sue Barnhill, BancTec:
The Arizona Cardinals -- "I'm cheering for Arizona so that Pittsburgh doesn't grab more Super Bowl rings than my team, the Dallas Cowboys."

Jim Bunn, IBML:
The Arizona Cardinals -- "Larry Fitzgerald is a wild, sinewy beast who cannot be stopped."

Dana Showers, Capture Sage:
The Pittsburgh Steelers -- "They are going to push Warner around."

Bob Lund, eGistics:
The Pittsburgh Steelers – “Based on their defense and history in the big game. My prediction: Steelers 24, Cardinals 13”

Mario Villarreal, US Dataworks:
The Arizona Cardinals -- "I'm an old Houston Oilers fan ... I hate the Steelers!"

Jason Glass, TAWPI:
The Pittsburgh Steelers – “Defense wins Super Bowls, and Pittsburgh has a shut-down defense. Ben Roethlisberger will become the worst quarterback to win two Super Bowls, and New England Patriots fans will never hear the end of it.”

Vincent Marzula, PNC Bank:
The Pittsburgh Steelers – “A strong defense trumps a strong offense.”

Robert Stangl, eGistics:
The Arizona Cardinals – “They must win, because they won’t be back soon.”

Jay Matyas, PNC Bank:
The Pittsburgh Steelers – “We waited almost 30 years for the ‘One for the Thumb.’ Now it’s time to begin on the other hand!”

Blaine Carnprobst, The Bank of New York Mellon Treasury Services:
The Pittsburgh Steelers – “Arizona has a high-powered passing attack with Warner, Boldin and Fitzgerald, but they are near the bottom on running and don’t have a strong defense. As a Steelers fan, my hope is that the secondary controls the Arizona passing attack and the Steelers offense has little difficulty with Arizona’s defense. My prediction: Steelers 24, Cardinals 17.”

Ron Victor, JPMorgan Chase:
The Pittsburgh Steelers – “I bleed black and gold … need I say more? Prediction: 27 to 16 Stillers … that’s Pittsburghese.”

Bruce Wallace, Silicon Valley Bank and
Chairman of the TAWPI Board of Directors:

The Arizona Cardinals – “Absolutely no logic … simply a hunch.”

Ed Pearce, eGistics:
The Pittsburgh Steelers – “I know the punter Sepulveda, who has been hurt all year.”

Frank Moran, TAWPI:
The Pittsburgh Steelers – “Pittsburgh is going to win by at least two touchdowns. The Cardinals should be on vacation. Remember, the Cardinals lost to the Patriots 47-7.”

Bill Welling, CDS Global:
The Arizona Cardinals – “Kurt Warner is destined to show the world that he has some magic left in him.”

Serena Smith, Fidelity National Information Services:
The Arizona Cardinals – “I always root for the underdog.”

Ed Kinsella, John Hancock:
The Pittsburgh Steelers – “Pittsburgh will win because of its tough, smothering defense ... but I’m rooting for the Cardinals. The first five minutes will determine the game.”

Rob Haberman, Purepay:
The Pittsburgh Steelers – “My money is on the Steelers. Roethlisberger is a smart, tough quarterback and the Steelers are very strong on defense. Prediction: Pittsburgh by 7.”

Chuck Corbin, BancTec:
The Arizona Cardinals – “Four reasons: perseverance, focus, Kurt Warner, and the fact that I am a die-hard Cowboys fan and have always hated both teams from Pennsylvania.”

Bryan Bruton, eGistics:
The Arizona Cardinals – “Since they were in the same division as the Dallas Cowboys when I was young … they will always be the St. Louis Cardinals to me.”

David Nitchman, TAWPI:
The Arizona Cardinals – “Kurt Warner becomes the only quarterback to win the Super Bowl with two different teams. Anything to wipe that infuriating smile off of Hines Ward’s face!”

Lesa Brooks, CDS Global:
The Pittsburgh Steelers – “The Steelers will win because they have more big game history – with the second-most Super Bowl appearances – and have the best winning percentage in those appearances. Not to mention they are the best football team ever!”

Wally Vogel, Purepay:
The Pittsburgh Steelers – “Because they have the triple threat of Roethlisberger, Parker and Ward.”

Joe Sass, US Bank:
The Pittsburgh Steelers – “Because Jay Matyas is a Steelers fan.”

Melissa Comeau, TAWPI:
The Pittsburgh Steelers – “Arizona is a lousy team.”

Debby Kristofco, IBML:
The Pittsburgh Steelers -- "I married a Pennsylvania boy."

What do you think? Post your prediction below.

Mail Days May Be Cut

Posted by Mark Brousseau

Below is an article from the Associated Press on the Postmaster General's request to Congress to lift the requirement that the agency deliver mail six days a week.

Postmaster General: Mail days may need to be cut
The Associated Press
Thursday, January 29, 2009; 2:41 AM

WASHINGTON -- Massive deficits could force the post office to cut out one day of mail delivery, the postmaster general told Congress on Wednesday, in asking lawmakers to lift the requirement that the agency deliver mail six days a week. If the change happens, that doesn't necessarily mean an end to Saturday mail delivery. Previous post office studies have looked at the possibility of skipping some other day when mail flow is light, such as Tuesday.

Faced with dwindling mail volume and rising costs, the post office was $2.8 billion in the red last year. "If current trends continue, we could experience a net loss of $6 billion or more this fiscal year," Postmaster General John E. Potter said in testimony for a Senate Homeland Security and Governmental Affairs subcommittee.

Total mail volume was 202 billion items last year, over 9 billion less than the year before, the largest single volume drop in history.

And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.

"It is possible that the cost of six-day delivery may simply prove to be unaffordable," Potter said. "I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week."

"The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge," Potter said.

That doesn't mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.

If it did become necessary to go to five-day delivery, Potter said, "we would do this by suspending delivery on the lightest volume days."

The Postal Service raised the issue of cutting back on days of service last fall in a study it issued. At that time the agency said the six-day rule should be eliminated, giving the post office, "the flexibility to meet future needs for delivery frequency.

A study done by George Mason University last year for the independent Postal Regulatory Commission estimated that going from six-day to five-day delivery would save the post office more than $1.9 billion annually, while a Postal Service study estimated the saving at $3.5 billion.

The next postal rate increase is scheduled for May, with the amount to be announced next month. Under current rules that would be limited to the amount of the increase in last year's consumer price index, 3.8 percent. That would round to a 2-cent increase in the current 42-cent first class rate.

The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.

Dan G. Blair, chairman of the Postal Regulatory Commission, noted in his testimony that cutting service could also carry the risk of loss of mail volume. He suggested Congress review both delivery and restrictions it imposed on the closing of small and rural post offices.

The post office's problem is twofold, Potter explained.

"A revolution in the way people communicate has structurally changed the way America uses the mail," with a shift from first-class letters to the Internet for personal communications, billings, payments, statements and business correspondence.

To some extent that was made up for my growth in standard mail _ largely advertising _ but the economic meltdown has resulted in a drop there also.

Potter also asked that Congress ease the requirement that it make advance payments into a fund to cover future health benefits for retirees. Last year the post office was required to put $5.6 billion into the fund.

"We are in uncharted waters," Potter said. "But we do know that mail volume and revenue _ and with them the health of the mail system _ are dependent on the length and depth of the current economic recession."

He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.

At the same hearing the General Accounting Office agreed that the post office is facing an urgent need for help to preserve its financial strength. But the GAO suggested easing the pre-funding requirement for only two years, with Congress to determine the need for more relief later.

Potter noted that the agency has cut costs by $1 billion per year since 2002, reduced its work force by 120,000, halted construction of new facilities except in emergencies, frozen executive salaries and is in the process of reducing its headquarters work force by 15 percent.

From the Postmaster General's Mouth

Posted by Mark Brousseau

Below is a link to Postmaster General John E. Potter's testimony before Congress Wednesday where he asked lawmakers to lift the requirement that the agency deliver mail six days a week. This proposal could have a significant impact on remittance and lockbox processors, industry observers point out.

What do you think? Post your comments below.

Wednesday, January 28, 2009

The Economy and Storage

By Mark Brousseau

The economic slowdown will be a reality through 2009, with overall IT spending growth falling from 5.1 percent growth in 2008 to 2.6 percent growth in 2009, according to IDC analysts who participated on a webinar today titled, “Worldwide Storage Top 10 Predictions.” IT spending will begin to slowly recover in 2010, with growth climbing to 4.5 percent, the analysts said, but a full recovery is not likely until 2011.

While the economy’s long-term impact on IT sectors will vary widely, all of them will struggle in the short run, the IDC analysts predicted. The worst hit will be the internal storage, tape, and high-end and mid-range server markets. The markets that will be least effected include security, systems software, and volume servers. IDC warns that some markets may never return to positive growth.

Against this backdrop, IDC believes users will demand greater storage efficiency, including:

… Block virtualization and thin provisioning (“must-haves,” according to IDC)
… Expanded use of data de-duplication
… Tiers for content with file virtualization
… “Greening” of storage
… Modularity/serverization for universal storage
… SAS as the standard interconnect used within external storage systems

Overall, IDC recommends that users “buckle up” as the industry is in the path of an economic hurricane. CIOs and line of business managers understand that money needs to be spent, IDC says, but are slowing purchases and need to do more with less budget. Controlling CAPEX expenditures will be a key requirement for our changing times, IDC says. For this reason, IDC predicts financing and leasing will emerge as a critical sales tool.

Similarly, storage promises to be a relatively stable segment during the economic downturn, but selling more efficient solutions will be critical. Showing quick return on investment is critical for selling solutions, and opens up additional services opportunities, IDC notes.

What do you think? Post your comment below.

Tuesday, January 27, 2009

Coopetition in the Payments World

By Mark Brousseau

According to the results of the Federal Reserve’s last two Payments Studies, electronic payments have risen from 43 percent of all non-cash payments to 66 percent of such payments over the period of 2000 to 2006. Conversely, checks have gone from 67 percent to 34 percent during this same period.

The message is clear: electronic payments are replacing check payments at a very rapid rate. So, it may surprise you to learn that one of the most common questions heard by providers of electronic payment solutions is, “do you have any capabilities for handling our paper-based payments?”

Why the continued interest in paper? Larry Jones of Cash Management Solutions, Inc. ( says the answer is simple: Although there are literally billions of payments that have migrated to electronic methods, the majority of high dollar and business-to-business payments are still made by check. This means that paper-based payment processing continues to be of great importance to many of the financial industry’s most prized clients, their corporate customers, Jones said.

Jones believes payments service providers must maintain their paper-based capabilities as they add alternative electronic channels. And, it is a well-known fact, he adds, that there is no system so efficient that it can overcome the inefficiencies of having to run it separately from, and simultaneously with, the system it is replacing.

“Until the landscape changes to the point where electronics replace all paper-payments, billers will continue to ask for methods and technologies that can affect a seamless convergence of these two distinct payment types,” Jones predicts. “Any payments service provider who is currently offering only paper processing should definitely be looking for the ability to offer on-line, direct to biller, bill payment services to their customers in a seamlessly merged deliverable.”

Likewise, any company that makes their living providing on-line bill payment systems or services should be looking for capabilities or partners who process paper payments and provide outputs that can be merged and delivered in a similarly seamless fashion, Jones adds.

What do you think? Post your comment below.

Thursday, January 22, 2009

Beware Poor Project Management

By Mark Brousseau

What is the biggest mistake end-users make when deploying a document management solution? It’s poor internal project management, according to Dana Showers, president of Capture Sage, LLC (717-732-9531/, a provider of comprehensive capture solutions.

“Everybody talks about choosing the right vendor, or hiring the right consultant. These are extremely important,” Showers said. “However, if an organization wants to protect itself, to ensure that it gets maximum return on investment from its document management solution, it needs to pay close attention to internal project management.”

Showers explained that insufficient project management can result in poor vendor selection, a poorly written contract, missing functionality, and a poorly implemented system.

To avoid these pitfalls, Showers offers the following recommendations:

… Ask prospective vendors to provide you with copies of the resumes of each person who will be working on your project. Once you get these, be sure to check their references. “A vendor trying to quickly ramp-up for a large project will often bring in highly intelligent, highly skilled people who have absolutely no experience with capture solutions. Inevitably, the resulting system will be deficient in the areas that matter most to end-users: usability and visibility. The user interface will be inefficient, and the system probably won’t have the types of reports the user needs,” Showers explained.

… Build into your contract system performance metrics for availability, image and text quality, and operator throughput rates. And be sure to include penalties for failure to deliver. Showers cited an example where an organization bought a system that crashed at least once a month.

… Build into your contract dates for system delivery, with progressive penalties for late delivery.

… Steer clear of vendors who under-bid to win your business. “This will undoubtedly cause problems during project execution,” Showers warned, noting that these vendors will typically look for ways to cut corners. “In most of these cases, the relationship between the end-user and the vendor quickly sours.”

… Be leery of vendors who are too agreeable. “There are vendors out there that promise anything to win your business,” Showers said, noting that he has seen one vendor promise two functionality points which were actually mutually exclusive at the product level.

What do you think? Post your comments below.

Thursday, January 8, 2009

Finance Executives Refocus Attention

By Mark Brousseau

The economic downturn has forced finance executives to refocus their attention on wringing cash from their business, looking beyond conventional improvements in working capital management, and making sure no opportunity for keeping their company well funded goes unexplored. That's according to a research report conducted in November 2008 by American Express and CFO Research Services.

Finance teams have prioritized spending more time on the following activities:

85 percent - Cutting cost of operations
83 percent - Improving cash management processes
81 percent - Developing better budgets, plans and forecasts

When asked about growth strategies in the face of a challenging credit market, nearly three-quarters of executives who responded to the question say they will pay more attention to the customer:

... Organic growth through improved customer relations
... Continued customer contact and service
... Focus on our core business, leveraging existing relationships

What is your perspective? Post a comment below.

Friday, January 2, 2009

Wanted: Cash Forecasting Technology

By Mark Brousseau

Senior financial executives say cash flow forecasting is the top area where better technology and/or more outsourcing is needed, according to Treasury & Risk's 2009 Strategic Treasury Survey. Thirty-six percent of respondents cited solutions as lacking in cash flow forecasting. Other areas seen as wanting: accounts payable (cited by 16 percent of respondents), accounts receivable (14 percent), budgeting and planning (13 percent), and cash management (13 percent).

What do you think? Post your comment below.

Thursday, January 1, 2009

Recession Impacts Gift Card Sales

By Mark Brousseau

Gift card sales haven't been spared from the global recession.

Store gift cards are expected to generate $61 billion in sales in the fourth quarter of 2008, down from $70 billion in 2007, according to Brian Riley, senior analyst at research firm TowerGroup.

The silver lining: those from financial institutions, like Visa gift cards, are expected to edge up to $28 billion in sales from $27 billion in last year's fourth quarter.

Consumers snapped up gift cards in prior years, USA Today reports. Last December, market research firm NPD Group said about 61 percent of Americans bought at least one holiday gift card in 2007, up from 31 percent the year before and just 16 percent in 2005.

What do you think? Post your comment below.

Mergers: Easy Way Out?

By Mark Brousseau

It wasn't that long ago that scores of payments solutions and services providers seemingly were in play, and private-equity firms and big companies were tripping over each other to buy them.

Now with the credit crunch and global recession forcing retrenchment everywhere, PricewaterhouseCoopers forecasts that 2009 will bring "mergers of necessity."

"Troubled companies will look to align with larger, stronger players in order to survive," says Robert Filek, a partner in the consulting firm's Transaction Services group.

Thomson Reuters says the value of announced transactions in the United States was $1.1 trillion for the first 11 months of 2008, down from $1.6 trillion for the same period in 2007.

What do you think? Post your comment below.