NU Online News Service, March 29, 4:30 p.m. – MedUnite Inc., a health insurance transaction processing consortium, agreed last week to work with Medi-Gate.net, L.L.C., East Brunswick, N.J., to make it easier for doctors to link their practice management systems to the Internet.

The move is one of several recent announcements that show MedUnite is starting to deliver on its promises, according to Lauri Ingram, senior program director for the Meta Group, a Stamford, Conn., research firm.

A few weeks before, MedUnite announced it had linked 70% of Connecticut’s commercially insured lives to the MedUnite Transaction Platform. The company says it is now starting a national rollout in key target areas, including the New York metropolitan area and California.

MedUnite “had some slow going to get started,” Ingram says. “They’re trying to turn it around. The recent announcements show they’re making headway.”

The San Diego-based outfit was founded by seven large managed care companies?Aetna Inc., Hartford; Anthem Inc., Indianapolis; CIGNA Corp., Philadelphia; Health Net Inc., Woodland Hills, Calif.; Oxford Health Networks Inc., Trumbull, Conn.; PacifiCare Health Systems Inc., Santa Ana, Calif.; and WellPoint Health Networks Inc., Thousand Oaks, Calif.

MedUnite promotes a shift to Internet-based communications for physicians, insurers, laboratories and other health care organizations, away from the old, inefficient paper-based systems.

The Medi-Gate agreement represents an effort to lure physicians online.

“All physicians’ offices have practice management systems, and they need to extract information from and get information into those systems,” says Glenn Woodworth, MedUnite’s chief medical officer. “Medi-Gate is an integrator offering the capability for bi-directional linkages between disparate physician practice management systems.”

Woodworth adds that Medi-Gate’s interface can work with many practice management systems, so that even those systems sold by vendors that are not working directly with MedUnite can be connected.

Advanced integration capabilities should lower the barriers to adoption of electronic transactions in physicians’ offices, Woodworth predicts.

“MedUnite has a lot going for them,” says Ingram. “They are funded by large payers who have a vested interest in their success.”

But MedUnite still has to show that it can handle national networks, Ingram says.

“I think MedUnite will be one of the three top vendors that have a respectable market share,” she continues. “But this is a cynical industry. The payers and providers want to see it work.”

Ingram says she is “not sure that any vendor will dominate the transactions market. The way health care is delivered, most of it is regional. Long term, I don’t think national plans are as viable as regional plans.”

To succeed, Ingram suggests, the MedUnite will have to offer genuine two-way communications.

“MedUnite must not only be a traffic cop for transactions, but they need to put in place up-front business rules in the doctor’s office, so the doctor knows” that a given person is approved for a given procedure, Ingram says. “EDI alone is not going to solve the health care crisis.”