The next BriefingsDirect healthcare finance insights discussion explores new ways of analyzing healthcare revenue trends to improve both patient billing and services.
Stay with us as we explore new approaches to healthcare revenue cycle management and outcomes that give patients more options and providers more revenue clarity.
To learn more about the next generation of data-driven patient payments process improvements, we’re joined by Jake Intrator, Managing Consultant for Data and Services at Mastercard, and Julie Gerdeman, CEO of HealthPay24. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.
Here are some excerpts:
Gardner: Julie, what’s driving healthcare providers to seek new and better ways of analyzing data to better manage patient billing? What’s wrong with the status quo?
Gerdeman: Dana, we are in such an interesting time, particularly in the US, with this being an election time. There is such a high level of visibility — really a spotlight on healthcare. There is a lot of change happening, such as in regulations, that highlights interoperability of data and price transparency for patients.
And there’s ongoing change on the insurance reimbursement side, with payer plans that seem to change and evolve every year. There are also trends changing provider compensation, including value-based care and pay-for-performance.
On the consumer-patient side, there is significant pressure in the market. Statistics show that 62 percent of patients say knowing their out-of-pocket costs in advance will impact their likelihood of pursuing care. So the visibility and transparency of costs — that price expectation — is very, very important and is driving consumerism into healthcare like we have never seen before due to rising costs to patients.
Finally, there is more competition. Where I live in Pennsylvania, I can drive a five-mile radius and access a multitude of different health providers in different systems. That level of competition is unlike anything we have seen before.
Healthcare’s sea change
Gardner: Jake, why is healthcare revenue management difficult? Is it different from other industries? Do they lag in their use of technology? Why is the healthcare industry in the spotlight, as Julie pointed out?
Intrator: The word that Julie used that was really meaningful to me was consumerism. There is a shift across healthcare where patients are responsible for a much larger proportion of their bills than they ever used to be.
And so, as things shift away from hospitals working with payers to receive dollars in an efficient, easy process — now the revenue is coming from patients. That means there needs to be new processes and new solutions to make it a more pleasant experience for patients to be able to pay. We need to enable people to pay when they want to pay, in the ways that they want to pay.
That’s something we have keyed on to, as a payments organization. That’s also what led us to work with HealthPay24.
Gardner: It’s fascinating. If we are going to a consumer-type model for healthcare, why not take advantage of what consumers have been doing with their other financing, such as getting reports every month on their bills? It seems like there is a great lesson to be learned from what we all do with our credit cards. Julie, is that what’s going to happen?
Consumer in driver’s seat
Gerdeman: Yes, definitely. It’s interesting that healthcare has been sitting in a time warp. Historically, there remain many manual processes and functions in the health revenue cycle. That’s attributed to a piecemeal approach — different segments of the revenue cycle were tackled either at different times or acquisitions impacted that. I read recently that there are still eight billion faxes happening in healthcare.
So that consumer-level experience, as Jake indicated, is where it’s going — and where we need to go even faster.
Technology provides the transparency and interoperability of data. Investment in IT is happening, but it needs to happen even more.
Gardner: Wherever there is waste, inefficiency, and a lack of clarity is an opportunity to fix that for all involved. But what are the stakes? How much waste or mismanagement are we talking about?
Intrator: The one statistic that sticks out to me is that care providers aren’t collecting as much as 80 percent of balances from older bills. So that’s a pretty substantial amount — and a large opportunity. Julie, do you have more?
Gerdeman: I actually have a statistic that’s staggering. There is waste of $265 billion spent on administrative complexity. And then another $230 to $240 billion attributed to what’s termed pricing failure, which means price increases that aren’t in line with the current market. The stakes are very high and the opportunity is very large.
We have data that shows more than 50 percent of chief financial officers (CFOs) want better access to data and better dashboards to understand the scope of the problem. As we were talking about consumerism, Mastercard is just phenomenal in understanding consumer behavior. Think about the personalized experiences that organizations like Mastercard provide — or Google, Amazon, Disney, and Netflix. Everything is becoming so personalized in our consumer lives.
But healthcare? We are not there yet. It’s not a personalized experience where providers know in advance what a consumer or patient wants. HealthPay24 and Mastercard are coming together to get us much closer to that. But, truly, it’s a big opportunity.
Intrator: I agree. Payers and providers haven’t figured out how they enable personalized experiences. It’s something that patients are starting to expect from the way they interact with companies like Netflix, Disney, and Mastercard. It’s becoming table-stakes. It’s really exciting that we are partnering to figure out how to bring that to healthcare payers and providers alike.
Gardner: Julie, you mentioned that patients want upfront information about what their procedures are going to cost. They want to know their obligation before they go through a medical event. But oftentimes the providers don’t know in advance what those costs are going to be.
So we have ambiguity. And one of the things that’s always worked great for ambiguity in other industries is to look at the data, extrapolate, and get analytics involved. So, how are data-driven analytics coming to the rescue? How will that help?
Data to the rescue
Gerdeman: Historical data allows for a forward-looking view. For HealthPay24, for example, we have been involved in patient payments for 20 years. It makes us a pioneer in the space. It gives us 20 years of data, information, and trends that we can look at. To me, data is absolutely critical.
Having come out of the spend management technology industry I know that in the categories of direct and indirect materials there have long been well-defined goods and services that are priced and purchased accordingly.
But, the ambiguity of patient healthcare payments and patient responsibility presents a new challenge. What artificial intelligence (AI) and algorithms provide are the capability to help anticipate and predict. That offers something much more applicable to a patient at a consumer level.
Gardner: Jake, when you have the data you can use it. Are we still at the point of putting the data together? Or are we now already able to deliver those AI- and machine learning (ML)-driven outcomes?
Intrator: Hospitals still don’t feel like they are making the best use of data. They tie that both to not having access to the data and not yet having the talent, resources, and tools to leverage it effectively. This is top of mind for many people in healthcare.
In seeking to help them, there are two places where I divide the use of analytics. The first is ahead of time. By using patient estimator tools, can you understand what somebody might owe? That’s a really tricky question. We are grappling with it at Mastercard.
By working with HealthPay24, we have developed a solution that is ready and working today. Answering the questions gets a lot smarter when you incorporate the data and analytics.
By working with HealthPay24, we have developed a solution that is ready and working today on the other half of the process. For example, somebody comes to the hospital. They know that they have some amount of patient payment responsibility. What’s the right way for a hospital to interact with that person? What are the payment options that should be available to them? Are they paying upfront? Are they paying over a period of time? What channels are you using to communicate? What options are you giving to them? Answering those questions gets a lot smarter when you incorporate data and analytics. And that’s exactly what we are doing today.
Gardner: Well, we have been dancing around and alluding to the joint-solution. Let’s learn more about what’s going on between HealthPay24 and Mastercard. Tell us about y
our approach. Are we in a proof of concept (POC) or is this generally available?
Win-win for patients and providers
Gerdeman: We are currently in a POC phase, working with initial customers on the predictive analytic capability that marries the Mastercard Test and Learn platform with HealthPay24’s platform and executing what’s recommended through the analytics in our platform.
Jake, go ahead and give an overview of Test and Learn, and then we can talk about how we have come together to do some great work for our customers.
Intrator: Sure. Test and Learn is a platform that Mastercard uses with a large number of partner clients to measure the impact of business decisions. We approach that through in-market experiments. You can do it in a retail context where you are changing prices or you can do it in the healthcare context where you are trying different initiatives to focus on patient payments.
That’s how we brought it to bear within the HealthPay24 context. We are working together along with their provider partners to understand the tactics that they are using to drive payments. What’s working, what’s working for the right patient, and what’s working at the right time for the right patients?
Gerdeman: It’s important for the audience to understand that the end-goal is revenue collection and the big opportunity providers have to collect more. The marriage of Test and Learn with HealthPay24 provides the intelligence to allow providers to collect more, but it also offers more options to patients based on that intelligence and creates a better patient experience in the end.
The marriage of Test and Learn with HealthPay24 provides the intelligence to allow providers to collect more, but it also offers more options to patients based on that intelligence, and creates a better patient experience.
If a particular patient will always take a payment plan and make those payments consistently – that is versus when they are presented with a big amount and wouldn’t pay it off – the intelligence through the platform will say, “This patient should be offered a payment plan consistently,” and the provider ends up collecting all of the revenue.
That’s what we are super-excited about. The POC is showing greater revenue collection by offering flexibility in the options that patients truly want and need.
Gardner: Let’s unpack this a little bit. So we have HealthPay24 as chocolate and Mastercard’s Test and Learn platform as peanut butter, and we are putting them together to make a whole greater than the sum of the parts. What’s the chocolate? What’s the peanut butter? And what’s the greater whole?
Like peanut butter and chocolate
Intrator: One of the things that’s made working with HealthPay24 so exciting for us is that they sit in the center of all of the data and the payment flows. They have the capability to directly guide the patient to the best possible experience.
They are hands-on with the patients. They can implement all of these great learnings through our analytics. We can’t do that on our own. We can do the analytics, but we are not the infrastructure that enables what’s happening in the real world.
That’s HealthPay24. They are in the real world. When you have the data flowing back and forth, we can help measure what’s working and come up with new ideas and hypotheses about how to try different payment programs.
It’s been a really important chocolate and peanut butter combination where you have HealthPay24 interacting with patients and us providing the analytics in the background to inform how that’s happening.
Gerdeman: Jake said it really well. It is a beautiful combination because years ago, the hot thing was propensity to pay. And, yes, providers still talk about that. It was best practice many years ago, of pulling a soft or even hard credit check on a patient to determine their propensity to pay and potentially offer financial assistance, even charity, given the needs of the patient.
But this takes it to a whole other level. That’s why the combination is magical. What makes it so different is there doesn’t need to be that old way of thinking. It’s truly proactive through the data we have in working with providers and the unique capabilities of Mastercard Test and Learn. We bring those together and offer proactively the right option for that specific patient-consumer.
It’s super exciting because payment plans are just one example. The platform is phenomenal and the capabilities are broad. The next financial application is discounts.
Through HealthPay24, providers could configure discounts based on their own policies and thresholds. But, if you know that a particular patient will pay the amount when offered the discount through the platform, that should be offered every time. The intelligence gives us the capability to know that, to offer it, and for the provider to collect that discounted amount, which might be more than that amount going to bad debt and never being collected.
Intrator: If you are able to drive behavior with those discounts, is it 10 percent or 20 percent? If you give away an additional 10 percent, how does that change the number of people reacting to it? If you give away more, you had better hope that you are getting more people to pay more quickly.
Those are exactly the sorts of analytical questions we can answer with Test and Learn and with HealthPay24 leading the charge on implementing those solutions. I am really excited to see how this continues to solve more problems going forward.
Gardner: It’s interesting because in the state of healthcare now, more and more people, at least in the United States, have larger bills regardless of their coverage. There are more co-pays, more often there are large deductibles, with different deductibles for each member of a family, for example, and varying deductibles depending on the type of procedures. So, it seems like many more people will be facing more out-of-pocket items when it comes to healthcare. This impacts literally tens of millions of people.
So we have created this new chocolate confection, which is wonderful, but the proof is in the eating. When are patient-consumers going to get more options, not only for discounts, but perhaps for financing? If you would like to spread the payments out, does it work in both ways, both discounts as well as in payment plans with interest over time?
Flexibility plus privacy
Gerdeman: In HealthPay24, we currently have all of the above — depending on what the provider wants to offer, their patient base, and the needs and demographics. Yes, they can offer payment plans, discounts, and lines of credit. That’s already embedded in the platform. It creates an opportunity for all the different options and the flexibility we talked about.
Earlier I mentioned personalization, and this gets us much closer to personalization of the financial experience in healthcare. There is so much happening on the clinical side, with great advances around clinical care and how to personalize it. This combination gets us to the personalization of offers and options for patients and payments like we have never seen in the past.
Gardner: Jake, for those listening and reading, who maybe are starting to feel a little concerned that all this information — about not just their healthcare, but now their finances — being bandied about among payers, providers, and insurers, are we going to protect that financial information? How should people feel about this in terms of a privacy or a comfort level?
We aspire and really do put a lot of work and effort into being a leader in data privacy and allowing people to have ownership of their data and to feel comfortable.
Intrator: That is a question and a problem near and dear to Mastercard. We aspire and really do put a lot of work and effort into being a leader in data privacy and allowing people to have ownership of their data and to feel comfortable. I think that’s something that we deeply believe in. It’s been a focus throughout our conversations with HealthPay24 to make sure that we are doing it right on both sides.
Gardner: Now that you have this POC in progress, what have been some of the outcomes? It seems to me over time the more you deal with more data, the more benefits, and then the more people adopt it, and so on. Where are we now, and do we have some insight into how powerful is this?
Gerdeman: We do. In fact, one example is a 400-bed hospital in the Northeast US that, through the combination of Mastercard Test and Learn and HealthPay24, were able to look at and identify 25,000 unpaid accounts. Just by targeting 5,000 of the 25,000, they were able to identify an incremental $1 million in collections to the hospital.
That is very significant in that they are just targeting the top 5,000 in a conservative approach. They now know that they have the capability through this intelligence and by offering the right plans to the right people to be able to collect $1 million more to their bottom line.
Intrator: That certainly captures the big picture and the big story. I can also zoom in on a couple of specific numbers that we saw in the POC. As we tackled that, we wanted to understand a couple of different metrics, such as increases in payments. We saw substantial increases from payment plans. As a result, people are paying more than 60 percent more on their bills compared to similar patients that haven’t received the payment plans.
Then we zoomed in a step farther. We wanted to understand the specific types of patients who benefited more from receiving a payment plan and how that potentially could guide us going forward. We were able to dig in, to build a predictive model, and that’s exactly what Julie was talking about. Those top 25,000 accounts, how much we think they are going to pay and the relative prioritization. Hospitals have limited resources. So how do you make sure that you are focusing most appropriately?
Gardner: Now that we have gotten through this trial period, does this scale? Is this somethin
g you can apply to almost any provider organization? If I am a provider organization, how might I start to take advantage of this? How does this go to market?
Personalized patient experiences
Gerdeman: It absolutely does scale. It applies across all providers; actually, it applies across many industries as well. Any provider who wants to collect more wants additional intelligence around their patient behavior, patient payments and collection behavior — it really is a terrific solution. And it scales as we integrate the technologies. I am a huge believer in best-of-breed ecosystems. This technology integrates into the HealthPay24 solution. The recommendations are intelligent and already in the platform for providers.
Gardner: And how about that grassroots demand? Should people start going into their clinics and emergency departments and say, “Hey, I want the plan that I heard about. I want to have financing. I want you to give me all my options.” Should people be advocating for that level of consumerism now when they go into a healthcare environment?
Gerdeman: You know, Dana, they already are. We are at a tipping point in the disruption of healthcare. This kind of grassroots demand of consumerism and a consumer personalized experience — it’s only a matter of time. You mentioned data privacy earlier. There is a very interesting debate happening in healthcare around the balance between sharing data, which is so important for care, billing, and payment, with the protection of privacy. We take all of that very seriously.
Nonetheless, I feel the demand from providers as well as patients will only get greater.
Gardner: Before we close out let’s extrapolate on the data we have. How will things be different in two or three years from now when more organizations embrace these processes and platforms?
Intrator: The industry is going to be a lot smarter in a couple of years. The more we learn from these analytics, the more we incorporate it into the decisions that are happening every day, then it’s going to feel like it fits you as a patient better. It’s going to improve the patient experience substantially.
The industry is going to be a lot smarter in a couple of years. The more we learn from these analytics, the more we incorporate it into the decisions that are happening every day. It’s going to improve the patient experience substantially.
Personally, I am really excited to see where it goes. There are going to be new solutions that we haven’t heard about yet. I am closely following everything that goes on.
Gerdeman: This is heading to an experience for patients where from the moment they seek care, they research care, they are known. They are presented with a curated, personalized experience from the clinical aspect of their encounter all the way through the billing and payment. They will be presented with recommendations based on who they are, what they need, and what their expectations are.
That’s the excitement around AI and ML and how it’s going to be leveraged in the future. I am with Jake. It’s going to look very different in healthcare experiences for consumers over the next few years.
Gardner: And for those interested in learning more about this pilot program, about the Mastercard Test and Learn platform and HealthPay24’s platform, where might they go? Are there any press releases, white papers? What sort of information is available?
Gerdeman: We have a great case study from the POC that we are currently running. We are happy to work with anyone who is interested, just contact us via our website at HealthPay24 or through Mastercard.