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November 1, 1998
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Steve Everest, president of Creative Healthcare Systems, Springfield, Mo., is wiring together an entire community in Kansas (hospitals, library, city agencies, schools and more). He points out one of the possible benefits when an extranet is available. "When the extranet is fully online, children’s immunization records will be available to public health officials. So now Mom doesn’t have to be constantly scrambling through files to find the paperwork." Instead, the information can be updated as needed and passed back and forth between the school and the right city agency.

Linking a town in Kansas is one example of how extranets can help connect people. When asked to define an extranet, however, most experts use a business-to-business scenario. David W. Donahue, president of Bentana Technologies, East Hartford, Conn., says simply: "It’s extending internal access to trusted, outside third partners."

One such "trusted outsider," explains Mark Kriegsman, president of ClearWay Technologies, Boston, might be an outside lab, with an extranet connection that allows the lab to post information directly to an HMO. Indeed, Bruce Elder, healthcare industry manager at Sun Microsystems, Palo Alto, Calif., says that initially extranets will be used in healthcare to transfer information among payors, providers and suppliers.

In addition, an extranet can include consumer interaction. For example, when Fed Ex allows customers into its system to track packages, the company is providing the same kind of access that the customer has via the telephone. The difference is the amount of time the customer saves and the amount of money the company saves. "The cost of a Web transaction is about 50 cents to one dollar, as opposed to paying a salary to someone who has to look up the information and pass it along," Kriegsman points out.

Good, bad and sensible
Costs savings is a major benefit technology experts point to when discussing extranets. "The driving force for extranets isn’t from IS, but from HR and CFOs," says Mark Huber, president of PayFlex Systems USA, Inc., Omaha, Neb. "They say, ’It’s costing us too much money to administer enrollment; we need to spend money on benefits.’" Huber notes that administration, especially in an HMO, is a significant part of an organization’s costs--and at a time when "the cost of healthcare is on the rise again, you’ll see pressure to kill costs wherever possible."

That’s why, Donahue notes, more companies are focused on "integrated outsourcing." Relying on third parties external to the organization to perform certain data functions cuts staff and overall costs.

Another benefit to extranets is avoiding what Donahue calls "Internet Interruptus." In other words, the workflow between one company and another moves smoothly via electronic transfer only so far, and then it must become manual. "The value of the extranet," Donahue says, "is in the true automation of the workflow process."

Yet another advantage found by using an extranet is business flexibility. Kriegsman notes that he’s been able to hire a hot-shot programmer in Arkansas for a lot less than if he had to use a programmer in New York. Extranets allow telecommuting, so a working parent at home with a sick child, or an employee on the road with a laptop, can still "plug in" to the company and do their work.

Finally, an extranet allows improved customer service, with 24-hour, seven-day access.

But even though some experts tout extranets as the next step to the paperless office (which computer experts have been promising for more than a decade), when pressed, they admit companies probably will never truly get rid of paper--and indeed might not want to. After all, Donahue says, there are times you want a paper trail. "[A paperless office] could only occur with a digital certificate on every end of the transaction [so as to authenticate the recipient]"--and that gets expensive. Besides, he says, there simply are times when a "wet signature"--pen on paper--is required.

Still, extranets can reduce the amount of paperwork. "If a company offers open enrollment on its three health plans, administrators can either hand out a lot of paper (which later has to be processed) or they can allow employees to select their choices online and the employer’s records update automatically," Huber says. With an extranet, employees can sign up for benefits through their home computers.

One of the greatest challenges in providing extranet service is integrating legacy systems. Elder notes that providing extranet access is a lot like providing phone service: "I can’t dictate what kind of equipment [the client] has. So I have to find a way to create a network service that works with whatever device (Mac, Compaq, UNIX, etc.) the client has."

Don’t forget the DMZ
That means MIS’ main concern isn’t necessarily whether the network exchange is EDI or the new LDAP technology--a gatekeeper between intranets and an open technology protocol similar to HTML. Rather, the key is how everything is hooked together. "The minute you ask one network server to do more than one thing, it’s easy to screw up," Elder says. That’s why, he says, it’s critical to have a DMZ network (demilitarized zone): segmented servers with one open to the public and another for employees logging on from the outside.

Everest agrees, noting that when the Kansas community’s extranet goes online, it will not only route through a separate server, there’ll be an Ethernet switch to break the link between the core Sun server and the extranet server.

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