Proposed Business Model

The Solution: AI-Powered Claims Processing

The proposed solution is the Intelligent Claims Processing System (ICPS). This system uses artificial intelligence to handle 85% of claims automatically (McKinsey & Company, 2024b).

The healthcare industry could save $20 billion per year by automating administrative work (CAQH, 2024). The ICPS helps UnitedHealth Group capture these savings while giving doctors and patients better service.

How the New System Works

The ICPS has five main parts:

1. Smart Document Reading The system uses OCR (Optical Character Recognition) to scan paper claims and NLP (Natural Language Processing) to understand the text. It fills in claim forms automatically without any typing. It can process 10,000 documents per hour.

2. Instant Insurance Checks
The system connects directly to membership databases. It checks if patients are covered in less than one second. It also calculates benefits automatically. This saves 70 minutes per patient visit (CAQH, 2024).

3. Automatic Payment Decisions The system has over 2,500 rules programmed in. For simple claims, it makes payment decisions without any human help. Only complex claims go to human reviewers. The goal is 85% automatic processing.

4. Fraud Detection Machine learning finds unusual patterns that might be fraud. The system flags suspicious claims for investigation while letting normal claims go through quickly.

5. Provider Portal Doctors can submit claims online and track their status in real time. They get instant alerts if something is wrong with a submission. This cuts phone calls to the call center by 40%.

Figure 1: Proposed AI-Powered Intelligent Claims Processing System (ICPS)

How the New Model Fixes Each Problem

Cost Analysis

The table below compares yearly operating costs:

Figure 2: Annual Operating Cost Comparison: Current vs. Proposed Claims Processing Model

Figure 3: Distribution of Annual Cost Savings by Category

The table below compares yearly operating costs:

How the Numbers Were Calculated:

Labor: Current = 2,400 workers × $120,000 average salary. Proposed = 960 workers × $119,500 average salary. The 60% staff reduction comes from automating routine tasks.
Error Fixes: Current = 1.3 billion claims × 15% error rate × $0.267 per fix. Proposed = 1.3 billion claims × 1.8% error rate × $0.267 per fix.
Technology and Software increase because the new AI system costs more to run, but savings in other areas more than make up for it.

Implementation Cost

Building the ICPS takes 24 months and costs $115 million:

Return on Investment (ROI)

The table below shows the 5-year financial projection:

Key Takeaways:

The company breaks even in Year 1
After 5 years, the net benefit is $815 million
For every $1 spent, the company gets $7.10 back