Managed Care System
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The managed health care system was originally developed by Bill Long as an HMO system for PacifiCare, Inc. when PacifiCare was a startup HMO. The sophistication and ease of use of the application helped give PacifiCare a strong competitive advantage. This contributed to its growth to a $12 billion a year multi-state corporation.

In 1982 Bill asked for and received development and marketing rights to the application from PacifiCare. His first client was J.P. Kennedy and Co., a third party administrator of self-insured employer health benefit programs. As good as the application was for the HMO model, it lacked the flexibility needed to handle a full range and combination of potential benefits. After it was redesigned and rewritten, Jim Kennedy, the owner of J.P. Kennedy & Co. rated it as among the top 10% of any administration application at any price for its comprehensiveness, ease of use, and flexibility

As an aside, after PacifiCare was bought by UniHealth in 1984, the CIO of UniHealth saw the PacifiCare application, saw how good it was, and had it translated into RPG to run on the IBM AS/400. He began marketing the application in 1986. In 1997 Unihealth's application was sold to OAO Technology Solutions. OAO earns $150 million a year from the marketing and servicing of this and related applications. More than 200 client companies use the application to administer claims for more than 7 million lives.

The original managed care application handled membership/Eligibility, Claims Processing, Provider Contracting and Capitation, Utilization Review, Authorization/Referrals, Billing, Medicare, and Medicaid. The updated application will also handle Section 125 cafeteria plans. It will be HIPAA compliant and web enabled with secure authorization, access, and data transmission.

Under the proprietary model of software development productivity has been low (200 source lines of code (sloc) per month average per developer). And cost has been high, about $25.00 to $50.00 per sloc. Trilonis-mc will, when finished, have about 150,000 lines of code. This would mean a development cost of at least $3.75 million if it were developed from scratch with current productivity standards. Open source has historically drawn the top 5% of developers. These developers are usually at least 10 times faster than the average with higher quality code. This means costs should be reduced to about $2.50 per line. In addition, by developing and releasing the application as open source under the GPL license, TriLon will be able to collaborate with the health care and open source communities on its design, development, and implementation. This means higher quality at a lower cost. As open source, it should take TriLon about 10 months to update this application at a cost of less than $150,000.

 

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