Healthcare’s Hidden Value Is in the Handoffs

The most valuable work in healthcare happens in the handoffs between organizations and inside them. Nobody measures that space, and nobody owns it. Closing those seams and proving what happened in between is where the value is.

A payer optimizes its side of a request. A provider optimizes theirs. Both may be performing well by their own measures. But who measures what happens between them? That is where a request spends most of its life, and it is where the patient sits, answering the same questions over and over.

That space exists twice. Once between the two organizations, where the handoff is visible, and everyone knows it is there. And again inside each of them, where a single request moves between intake, clinical review, claims, and appeals. The internal handoffs are the more numerous of the two and the less examined. A request can cross a dozen boundaries without ever leaving the building.

The Seam Tax

The healthcare industry has built durable businesses inside those gaps. Clearinghouses and fax machines operate side by side because HIPAA standardized electronic transactions thirty years ago without establishing a corresponding standard for clinical attachments. Provider data management exists because one physician’s information lives in a dozen systems and may not match in any of them. Payment integrity exists because claims and the clinical records behind them get reconciled after payment rather than before it. Each of these is a real business with real margin. Each solves a legitimate problem. But each also collects a toll created by the friction between systems. Call it the seam tax.

Part of it is already measured. DataSpring, formerly CAQH, puts the savings still available from automating existing administrative transactions at roughly $21 billion a year. Roughly forty percent of medical prior authorizations run on the standard electronic transaction. A portal does not count toward that, and should not, especially when a portal is a person retyping a chart into a web form.

One case shows the shape. A specialty drug renewal arrives by portal. The clinical notes follow by fax because no adopted standard carries the attachment. The pages land unindexed and never reach the case, so the reviewer asks for records the practice already sent. The reviewer applies the criteria, approves it, and the next dose is late. The clinical judgment was the smallest part of that sequence, and it was sound. Everything around it was transfer.

The same shape appears wherever a request crosses a boundary. A claim paid on incomplete information and corrected months later. A patient who calls three times because nothing carried the answer from the first call. An appeal that succeeds because the second reviewer finally had records the first reviewer never received.

I have seen this from every side. I was an AI and platforms software leader in a national health plan. I served as Chief Technology Officer at a risk adjustment and payment integrity company. I now run a healthcare software company built to close these gaps. Those are durable and profitable industries, and they stay that way exactly as long as the seams stay open.

What the Savings Actually Are

A request that stalls and a request that reaches a decision both eventually leave the queue. In most savings reporting, however, the difference between those outcomes disappears. Medical management illustrates the problem clearly: organizations may report three very different types of savings as a single number.

The first comes from friction: care that should have happened but did not because a request stalled somewhere in the process and was never resolved. The second comes from delivering appropriate care in a more cost-effective way, such as using an ambulatory surgery center instead of a hospital outpatient department, a biosimilar instead of the reference product, or home infusion instead of a hospital infusion center. The third comes from preventing care that should not happen at all, such as catching a duplicate order or identifying a dose that does not match the patient’s weight.

Those distinctions matter. The second and third categories represent durable clinical value. The first does not. Yet when all three are reported together, legitimate savings become difficult to defend because criticism of savings created by friction can easily extend to savings created by better clinical decisions. Separating them makes the value clearer and more defensible.

Closing the seams between systems and functions changes that equation. When stalled requests become resolved requests, some result in approvals. That means appropriate care is delivered and paid for, increasing medical costs that may previously have appeared as savings. Making that cost visible is important because it separates savings created by unresolved friction from savings created by genuine clinical value.

The same pattern appears across every function that touches a request. A claim recovered after the fact can look like a successful recovery even though paying it correctly the first time would have been better. A service issue can appear closed simply because the patient stopped calling. An appeal that is never filed can look like a completed process even when the underlying issue was never resolved. Each may register as an outcome. But an ending is not necessarily a resolution.

Nobody Owns the Seams

Functions have owners, budgets, and reporting lines. The handoffs between them rarely have any of these. Inside an organization, intake, clinical review, claims, and appeals each report somewhere, and the space between them reports nowhere. Between organizations, intermediaries such as clearinghouses and connectivity networks facilitate the exchange. But who is accountable for whether a request moves across those boundaries quickly, accurately, and resolves correctly the first time?

That is the question that determines whether these seams actually get addressed. Does anyone have authority over the budget on both sides of the handoff? Is anyone accountable for reducing unnecessary transfers? Common reporting is not common accountability.

Measurement has the same challenge. Individual functions measure what happens within their boundaries, while the most meaningful measures may need to cross them. Avoidable touches per resolution is one place to start: How many times does a person have to intervene simply because two systems failed to exchange the information needed to resolve a request?

There is an important distinction, however. Not every human touch represents inefficiency. Some are necessary safeguards. Notification, reconsideration, and external review provide due process in many lines of business. The same is true of a nurse who calls a treating office to coordinate a safe discharge or a representative who stays on the line until an issue is resolved. A measure that treats every human intervention as waste risks eliminating the safeguards it should preserve.

Proving What Happened Is Also a Product

Closing a seam is half the work. The other half is proving what happened inside it. When a request crosses four systems and comes back approved, very few organizations can reconstruct what actually occurred along the way. Which system held it, and for how long. What information arrived, and what arrived late. Where the decision was really made. That record generally does not exist, and its absence is why the same failures repeat. The space between systems is the least visible part of healthcare, and visibility is what makes any of it improvable.

Closing a seam is a real win. Keeping it closed depends on measurement that outlives the work that closed it. When the proof stops, a seam reopens, and the next one goes unnoticed. Visibility that lasts beyond the initial work shows whether an existing seam has reopened or a new one has emerged.

What Makes This Worth Doing Now

This is a tractable problem. The transfers are countable. The standards largely exist. The regulatory rails for prior authorization arrive in January 2027. Plenty of people inside health plans are already working on this, and many have been for years. What has been missing is a shared measure that crosses functions and an owner whose scope covers the seams between them.

We started Care Lumen explicitly for this.

For years, value in healthcare technology centered on systems of record. Then it shifted toward companies that could manage the gaps between them. The next opportunity is to eliminate those gaps altogether: connecting the systems, reducing subsequent friction, and creating a clear record of what happened along the way. The next generation of healthcare technology will create value by closing gaps and proving they stay closed.