The Role Of EDI in Healthcare

3 min readJul 2, 2021


Healthcare sector has more than just medicines and doctors and patients to do with. It was into them only when there was no internet. Today, we have internet users, and smart devices as well that altogether can turn things completely upside down.

Today, the healthcare sector is so prevalent that every fourth person in this world has something to do with it. In some countries, healthcare is quite a crucial thing that rules there make citizens keep themselves insured for their health even if they don’t want to. EDI transformed the healthcare industry in countries like the United States of America where an employer has to keep its employees health insured to get them working.

The federal government of the USA has such rules that asks the employees as well as the employers to insure their employees for health. The Obama care act is an example, concerned with healthcare only.

As far as EDI in healthcare sector is concerned, we need to understand what other things than medicines, doctors, hospitals, and patients, that healthcare sector has business to do with?

EDI service providers in the healthcare sector have become prevalent after the compulsory inclusion of insurance in some countries. Before that, EDI was known just as a technology to transmit information from one point to another. However, it does the same thing today too, but things and its recognition are quite changed now.

Healthcare sector has always been involved with the insurance sector for claims and settlement related things.

Earlier, there were physical exchanges of information for the same purposes like claim settlement, etc. With time, things have changed and physical exchange got advanced and transformed into digital exchanges through emails, etc.

But the threats of manipulation and possibilities of data loss have not completely vanished yet. Things like data manipulation were so common with insurance for false claim settlements which raised demand for better safety.

EDI came here into its role in the healthcare industry and changed a few things completely around.

With Electronic data interchange, the data gets transmitted with utmost safety through different EDI solutions like web based EDI, Mobile EDI, or EDI VAN, etc.

Usually, in EDI, the data is hashed by the middleman i.e. a computer used to encrypt the data in between two peers or (point of exchanges). That middleman is known to add value to the data, that is called the encryption of the data.

Now, with EDI, there are more than 400 types of different transactions made everyday across the globe with required safety and least time consumption.

EDI has some standards to follow that are set by the ANSI (American National Standards Institute) for every specific form of transaction. For example, to enroll an employee into a healthcare insurance plan, EDI 834 standard has to be implemented. And the transaction or application of an enrollment is made using EDI 834 standard only, by any organization, in any country.

However, it is a choice to rather use EDI with set standards or customize your own EDI. The issue arrives only if the other body would not be accepting the customized EDI transactions.

Some publicly known standards in EDI used by top industries include-

EDI 834- For enrollment of an employee, modification in any basic details, or reinstatement.

EDI 856- For an advance intimation to the customer regarding a pending shipment of a product

EDI 820- For payment related matters in the exchange between two peers, etc.

Similarly, there are more than 400 standards that have a specific meaning and therefore, are supposed to be used in the same way by every corporate body, to keep the singularity maintained across the globe, for quick and safe transfer of data and easy accomplishment of crucial work.




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