Why America Needs a Healthcare Clearing Corporation

The following is a guest article by Stuart Z. Goldstein

What if the healthcare industry didn’t have to support multiple disparate technology connections between health insurers and hospital providers? What if you could connect to one “super highway” of technology linking all stakeholders in the healthcare industry? Could you save some of the nearly $750 billion in administrative expense (15% of the total $5.3 trillion in health costs annually)?

Clearly, we have reached a tipping point in the affordability crisis in healthcare. Few large sectors of the U.S. economy have grown faster and more steadily as a percent of total GDP. However, the point of friction in national healthcare policy is preoccupied with who should be covered, to what extent, and how much consumers should pay.

But even as the industry has seen some consolidation, we are still suffering under the same weight of administrative burden that the patch quilt of technology imposes on insurance carriers and provider hospitals. You won’t find reliable industrywide figures for IT spending on redundancy, resilience, or data backup centers. Under current circumstances, with numerous technology connections, the costs to ensure safety and soundness from disruption are near cost-prohibitive.

There is nothing inevitable about this current antiquated system. Other industries confronted similar problems—and solved them.

In the late 1960s and early ’70s, Wall Street was overwhelmed by paperwork, i.e., millions of physical stock certificates and paper trade confirmations. Back-office staff could not reconcile trades fast enough, errors multiplied, settlement delays increased risk, and payment delays caused firms to fail under the strain.

The New York Stock Exchange (NYSE) closed on Wednesdays to catch up with the paperwork (with nearly 15 million shares daily). Today, U.S. equity markets trade 2.3 billion shares each day. Consider: U.S. capital markets trade between $5 -6 trillion in securities transactions daily and settle payment next day.

The solution was the creation of a national clearing and settlement utility—what is now The Depository Trust & Clearing Corporation (DTCC). By standardizing transaction formats, automating matching, eliminating paper certificates, unifying technology requirements, and centralizing payment, DTCC transformed the industry. It reduced operational risk, lowered costs, and accelerated settlement cycles, thereby giving U.S. markets the lowest cost post-trade infrastructure in the world.

Early on, financial firms had to buy into the idea that DTCC’s single technology platform would save them investment that could be better allocated against other service requirements. Industrywide stakeholder collaboration, ownership, and building toward consensus helped centralize, standardize, and streamline costs among thousands of financial firms. DTCC leveraged the knowledge of smaller clearing corps that existed. They continued to provide a seamless chain of data flow as “correspondent clearing firms,” who helped firms focus on trading securities while delegating backend technology processing to third parties.

The healthcare industry is at the stage financial markets were before DTCC. Thousands of participants—insurers, hospitals, physician practices, clearinghouses, billing firms, and software vendors—operate on incompatible systems with no universal standard for claims, eligibility verification, or payment. The result is a structurally inefficient system.

What the country needs is a Healthcare Clearing Corporation (HCCC) or an equivalent of a clearing and settlement utility. It would not replace private insurance or reshape clinical care. Instead, it would serve as a neutral, industry-governed infrastructure platform that standardizes claims, validates eligibility, applies coverage rules, and settles payments electronically at high speed.

A well-designed HCCC would function much like DTCC. Insurers and healthcare providers would submit claims through a single standardized format and reduce the need to support multiple technology connections. Eligibility would be verified quickly. Coverage rules would be applied consistently. Insurers would receive one unified data feed instead of dozens of inconsistent formats. And payments could be executed electronically within days, not months.

The goal is not to change who pays for healthcare, but to eliminate the friction and redundancy in how payments occur.

Benefits are substantial:

Lower Administrative Costs: When every insurer maintains its own proprietary interface, rules set, and coding requirements, providers must support and maintain dozens of costly workflows; a centralized utility eliminates that duplication – even a modest reduction in administrative expense ($750 billion) would produce significant savings

Greater Technology Resilience: The 2024 cyberattack on Change Healthcare (when over 190 million people’s data was exposed) underscores how a central utility could lower costs to achieve strong cybersecurity, redundant systems, reduce systemic risk, and ensure continuity of operations.

More Transparency: A unified data platform requiring collaboration among insurers, providers, and policymakers/regulators ensures better visibility into utilization, bottlenecks, and inefficiencies

The HCCC would not be a government-run system. It could more closely resemble DTCC’s industry-led model.

Unlike the non-productive debate on patient care, modernizing the technology infrastructure does not require ideological alignment. Every stakeholder benefits from faster payments and lower overhead. Technology is not the obstacle. It offers the most effective way to move forward. What is missing is unified industry coordination.

A Healthcare Clearing Corporation would not solve every challenge in American healthcare. But it would address the one problem that affects every insurer, every hospital, every physician, every employer, and every patient: the needless complexity and cost embedded in the system. Until we tackle this area of administrative waste, it will continue to drain resources that could be better spent on patient care, innovation, and affordability.

The need is urgent. If the United States wants a more efficient and affordable healthcare system, it must start by modernizing the technology infrastructure beneath it.

About Stuart Z. Goldstein

Stuart Z. Goldstein served as Managing Director of Corporate Communications and Public Affairs at The Depository Trust & Clearing Corporation (DTCC) on Wall Street for three CEOs over 20 years; also a member of DTCC management committee (now retired).

He co-authored two books in plain English, Guide to Clearance & Settlement: An Introduction to DTCC (2009) and Lifecycle of a Security (2010), which were used with Congress to explain the inner workings of U.S. capital markets.

The following is a guest article by Stuart Z. Goldstein

What if the healthcare industry didn’t have to support multiple disparate technology connections between health insurers and hospital providers? What if you could connect to one “super highway” of technology linking all stakeholders in the healthcare industry? Could you save some of the nearly $750 billion in administrative expense (15% of the total $5.3 trillion in health costs annually)?

Clearly, we have reached a tipping point in the affordability crisis in healthcare. Few large sectors of the U.S. economy have grown faster and more steadily as a percent of total GDP. However, the point of friction in national healthcare policy is preoccupied with who should be covered, to what extent, and how much consumers should pay.

But even as the industry has seen some consolidation, we are still suffering under the same weight of administrative burden that the patch quilt of technology imposes on insurance carriers and provider hospitals. You won’t find reliable industrywide figures for IT spending on redundancy, resilience, or data backup centers. Under current circumstances, with numerous technology connections, the costs to ensure safety and soundness from disruption are near cost-prohibitive.

There is nothing inevitable about this current antiquated system. Other industries confronted similar problems—and solved them.

In the late 1960s and early ’70s, Wall Street was overwhelmed by paperwork, i.e., millions of physical stock certificates and paper trade confirmations. Back-office staff could not reconcile trades fast enough, errors multiplied, settlement delays increased risk, and payment delays caused firms to fail under the strain.

The New York Stock Exchange (NYSE) closed on Wednesdays to catch up with the paperwork (with nearly 15 million shares daily). Today, U.S. equity markets trade 2.3 billion shares each day. Consider: U.S. capital markets trade between $5 -6 trillion in securities transactions daily and settle payment next day.

The solution was the creation of a national clearing and settlement utility—what is now The Depository Trust & Clearing Corporation (DTCC). By standardizing transaction formats, automating matching, eliminating paper certificates, unifying technology requirements, and centralizing payment, DTCC transformed the industry. It reduced operational risk, lowered costs, and accelerated settlement cycles, thereby giving U.S. markets the lowest cost post-trade infrastructure in the world.

Early on, financial firms had to buy into the idea that DTCC’s single technology platform would save them investment that could be better allocated against other service requirements. Industrywide stakeholder collaboration, ownership, and building toward consensus helped centralize, standardize, and streamline costs among thousands of financial firms. DTCC leveraged the knowledge of smaller clearing corps that existed. They continued to provide a seamless chain of data flow as “correspondent clearing firms,” who helped firms focus on trading securities while delegating backend technology processing to third parties.

The healthcare industry is at the stage financial markets were before DTCC. Thousands of participants—insurers, hospitals, physician practices, clearinghouses, billing firms, and software vendors—operate on incompatible systems with no universal standard for claims, eligibility verification, or payment. The result is a structurally inefficient system.

What the country needs is a Healthcare Clearing Corporation (HCCC) or an equivalent of a clearing and settlement utility. It would not replace private insurance or reshape clinical care. Instead, it would serve as a neutral, industry-governed infrastructure platform that standardizes claims, validates eligibility, applies coverage rules, and settles payments electronically at high speed.

A well-designed HCCC would function much like DTCC. Insurers and healthcare providers would submit claims through a single standardized format and reduce the need to support multiple technology connections. Eligibility would be verified quickly. Coverage rules would be applied consistently. Insurers would receive one unified data feed instead of dozens of inconsistent formats. And payments could be executed electronically within days, not months.

The goal is not to change who pays for healthcare, but to eliminate the friction and redundancy in how payments occur.

Benefits are substantial:

Lower Administrative Costs: When every insurer maintains its own proprietary interface, rules set, and coding requirements, providers must support and maintain dozens of costly workflows; a centralized utility eliminates that duplication – even a modest reduction in administrative expense ($750 billion) would produce significant savings

Greater Technology Resilience: The 2024 cyberattack on Change Healthcare (when over 190 million people’s data was exposed) underscores how a central utility could lower costs to achieve strong cybersecurity, redundant systems, reduce systemic risk, and ensure continuity of operations.

More Transparency: A unified data platform requiring collaboration among insurers, providers, and policymakers/regulators ensures better visibility into utilization, bottlenecks, and inefficiencies

The HCCC would not be a government-run system. It could more closely resemble DTCC’s industry-led model.

Unlike the non-productive debate on patient care, modernizing the technology infrastructure does not require ideological alignment. Every stakeholder benefits from faster payments and lower overhead. Technology is not the obstacle. It offers the most effective way to move forward. What is missing is unified industry coordination.

A Healthcare Clearing Corporation would not solve every challenge in American healthcare. But it would address the one problem that affects every insurer, every hospital, every physician, every employer, and every patient: the needless complexity and cost embedded in the system. Until we tackle this area of administrative waste, it will continue to drain resources that could be better spent on patient care, innovation, and affordability.

The need is urgent. If the United States wants a more efficient and affordable healthcare system, it must start by modernizing the technology infrastructure beneath it.

About Stuart Z. Goldstein

Stuart Z. Goldstein served as Managing Director of Corporate Communications and Public Affairs at The Depository Trust & Clearing Corporation (DTCC) on Wall Street for three CEOs over 20 years; also a member of DTCC management committee (now retired).

He co-authored two books in plain English, Guide to Clearance & Settlement: An Introduction to DTCC (2009) and Lifecycle of a Security (2010), which were used with Congress to explain the inner workings of U.S. capital markets.