Academic journal article Journal of Information Systems Education

Implementation of an Interorganizational System: The Case of Medical Insurance E-Clearance

Academic journal article Journal of Information Systems Education

Implementation of an Interorganizational System: The Case of Medical Insurance E-Clearance

Article excerpt


Frank Tsai was sitting in his chamber and pondering over the three hour marathon meeting which he just presided. The meeting went over time. It was nearing midnight now, and his colleagues had all departed one after the other. The meeting ended without any strong conclusion, and he was wondering on ways to get the implementation of the e-clearance management system of the medical insurance clearance system (MEDICS) for the city of Xiamen back on track. As project manager he was responsible for timely delivery of the project. His company, Xiban Software, had beat many competitors in bagging this project from the medical insurance bureau of Xiamen and had a lot at stake in this project. The co-ordination between XBC (Xiamen Area Bank of China), hospitals of Xiamen, and the medical insurance bureau of Xiamen was proving to be the toughest challenge, apart from the many technical issues cropping up during the implementation. The fate of the e-clearance management system project was still far from clear, and the future plan to extend it to all types of cash management in other social insurance programs looked uncertain. Frank was worried that his success as a project leader was soon going to be questioned at Xiban. It was high time for Frank to sort out the technological and organizational glitches in the project if he had to keep his reputation, as well as his job, in place.

1.1 Medical insurance management in Xiamen

Xiamen was a coastal city located in south-east China, with a total population of about 1.5 million. It was a sub-provincial city under the Fujian province. Xiamen was one of the first five special economic zones in China. The growth rate of its GDP averaged 18.3% in the past 26 years. The local government of Xiamen had a lot of funds, and it had been investing heavily in a variety of information systems that were being used in government organizations. Among the various government divisions, the social insurance division was considered to be an important one, and it received sizable funding for improving its information systems (Fujian Statistical Bureau, 2006). The electronic medical insurance management system for Xiamen was first implemented in July 1997. The system provided medical insurance service to 420,000 members who were based in Xiamen city. Each month, the billing subsystem calculated the amount that each insured should pay for medical insurance fee, and sent out billing notice. The system also dealt with insurance balance management for the insured. The most important function of the system was to provide billing service for the insured when they paid for the medical treatment that they received at the hospital. The MEDICS had direct network connection with all major hospitals and pharmaceutical shops in Xiamen, and it had a system interface to interact with the different hospital information systems. When an insured got medical treatment and wanted to check out, the hospital information system sent out relevant information to the MEDICS through the system interface, and immediately received feedback about how much the insured should pay, and how much the medical insurance bureau should pay. Next day, the medical insurance bureau would send electronic payment information to designated commercial banks to transfer the required amount of money from its account to accounts of the hospitals. The system had worked quite well in the past but it was increasingly leading to a number of inconveniences for the insured.

1.2 Evolution of medical insurance claims management

The MEDICS had evolved slowly and steadily to its current state. The clearance management systems was the latest in the evolution of the system that planned to provide a holistic and consolidated way of handling the overall insurance claims management process. The MEDICS dealt with the whole process involved in an insured getting treatment at the hospital, buying medicines in the pharmaceutical shops, and making payments for the medical service. …

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