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Healthcare Revolution: The Patient Is the New Payer [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Jonathan Wiik, author of the book Healthcare Revolution: The Patient is the New Payer. Jonathan talks about this new reality and some ideas for engaging patients about the financial aspects of their care. 

Learn how to listen to The Hospital Finance Podcast on your mobile device.

Highlights from this episode include:

  • How healthcare can learn from other industries’ customer service experiences
  • How hospitals can engage patients better in regard to payment plans, loans, and charity care
  • The potential benefit of vouchers and the open marketplace

Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast

Today, I’m joined by Jonathan Wiik, a principal in the Healthcare Solutions Division at TransUnion.

Jonathan is the author of a book entitled Healthcare Revolution: The Patient is the New Payer. On today’s show, Jonathan is going to talk with us about this new reality and discuss some ideas for engaging patients more effectively about the financial aspects of their care.

Jonathan, welcome to the show!

Jonathan Wiik: Thank you for having me. It’s a pleasure to be here.

Mike: So, your book is broken into three parts—How We Got Here, Where We Are Now and What Happens Next. And for this discussion, I’d really like to focus on that third section, What Happens Next. And in that section, you explored how healthcare could learn from other industries’ customer service experiences including restaurants, airlines and Amazon. I love those analogs. So I might just talk to you about them.

Obviously, those industries do manage their customer experiences quite differently than we do in healthcare. So can you walk us through a few of the examples you mentioned in the book?

Jonathan: Yeah, sure. I think I’ll start with restaurants. They seem to have some of the latest innovations. I don’t know if you’ve been to a Chili’s or maybe a Rock Bottom or on any of these chains. I think, someday, whether we like it or not, we may see a waiter or waitress-less experience. You can almost order through those and pay and have your bill there or order an online menu. I’ve seen that as well. You actually pick the food up and eat it in your own home. They’ve got a dedicated parking spot there because that’s just what their customers want.

You can see what the wait is. You can understand the busiest time. You can call ahead. That’s a very interesting way of delivering food to where, before, you kind of roll the dice and make sure you get there before 5:00 or 5:30 or 6:00 on a Friday night. Otherwise, you knew you’d be waiting two or three hours, and we’re pretty much in the dark. But in the last decade, we’ve really seen some innovations there.

In the auto industry, specifically in the mechanics area, that’s really evolved quite a bit too for the customer. I think you can shop and compare things like tires, oil changes, transmissions, clutches. You could see what the wait time is. You could chat, figure that out. They could text you. There are apps too out there where they could tell you [what that is and where they’re going]. The book talks through that a little bit.

And then, finally, in the airlines, the joke I like to say there is—I fly quite a bit in my job. And I don’t really talk to anybody about what I’m doing when I’m flying other than what I’d like to have to drink when I’m on the plane. But I pretty much pick my seat, the time I’m going to fly, where I’m going, when I’m going to come back, whether my bags need to come with me or not or I’m going to pay for them, the size of the seat I’m in, the time of day, the type of plane, the airports in which I’m going to go all through my phone. And my profile knows that I like an aisle seat, that I fly a certain airline, and I prefer a mobile boarding pass. And I want alerts on whether my flight is late through texts and not through email so I can get it right away. All that stuff is set up. And I know the cost. I can pick the time of day in which I’m going to come and fly that plane or ride in that plane ride.

I think those things need to absolutely evolve into healthcare at some point. Healthcare certainly isn’t hamburgers, transmissions or a plane ride. But at the same time, if you tried to call up a provider and ask, “What time could you see me?”, that typically involves a dialogue and some level of telephonic discussion, rarely electronic. And when you start talking about the services that you’re going to get and which level that they’re going to be at, and also the prices that are surrounding those, and ultimately, what you as a consumer will be paying as a patient, that gets very, very dark in the current technology.

So, I think we can learn some things. The book talks about on that. We’re not going to learn everything. But that last chapter of the book is called Wouldn’t It Be Nice. Wouldn’t it be nice if, when you onboarded to your healthcare, it was a similar experience as when you were shopping for a plane ticket in that you knew those things of how much the coverage was, when the plane was going to take off, or when your care is going to happen, what your options were for choices of care, be it primary care, urgent care, those types of things.

There are inputs to that, but we haven’t gotten to that level of trust or technology to afford that patient-as-a-payer consumer experience that we all want as patients.

Mike: Yeah. So, let’s talk about those future funding mechanisms because, as you intimated in the title of the book, the patient is going to be the new payer. They are the new payer, and so how healthcare gets paid for is going to be dramatically different going forward.

And you cover different versions of what that could look like all the way from self-pay to universal coverage of different kinds. So let’s talk about a few of them.

You start out by delving into how hospitals first off could better engage patients early on in the process about payment plans, things like loans and charity care and so on. So, how can hospitals be engaging patients better around those kinds of options?

Jonathan: I think hospitals are doing the best they can with what they have. Their first goal—and the book talks about this as well— is really to get that patient into where they need to be and start assessing it and run a test to get them well in the most efficient way they can.

The coverage and cost of that element has kind of been unbridled for the most part of the last couple of decades. And so patients have had to self-navigate that for the most part. They’re asking hospitals pretty difficult questions about “Hey, are you in my network? How much is this going to cost? Do you take insurance? I have a thousand dollar deductible. How much is this going to pay?” or they may not be asking any of those questions.

So, what I think providers can do is, really, they need to engage that patient early. And by engaging them, I mean, “Hey, we’ve got a clinical plan. Let’s talk about your financial plan too. What does that look like? We can run a pre-service estimate for you and check your coverage and understand what your out-of-pocket is. But we want to help you navigate those costs, be it through payments over time, loans or even possibly having charity or financial assistance navigation help”.

I think that process happens at or after. It doesn’t happen as probably as we, consumers, would like it upfront. And I think it’s a function of resources and time.

I was a chief revenue officer at a hospital for a long time. And I had to focus on blocking and tackling a lot what were the tasks that absolutely needed to get done today. And those were saying hello to a patient, registering them, making sure I had the right one, adding charges to their accounts, sending that bill out and getting paid for it, and then calling a patient beforehand. I had to have a person that would do that. And sometimes, if I only had 10 people and I needed 12 to do it, I couldn’t take 2 from the folks that were doing all these other things that I talked about.

So, it really is an investment. I think patients have choices these days about their level of care, where they’re going to go. And they are starting to shop more and more. And I think the providers that do it well to where they are reaching the patient in the way that they want to be reached—be that through mobile, the web or even their phone—are going to find that that patient is going to value that experience more because they help them all the way instead of just part of the way.

Mike: Any thoughts on how you manage sticker shock? I think we talked about some of the analogs in more B2C, retail parts of how our consumers live their lives. And they kind of expect that when you’re going to go in and have your car repaired, there’s going to be a bill, and they’ve got to pay for that bill. But if you’ve got insurance, or you think you’ve got insurance, and you go to the hospital, and they say, “No, you really need to pay the first $3000 out of your own pocket,” and they just didn’t have that in mind, how do you as a hospital engage with them around that and get them to understand that and moderate that discussion?

Jonathan: I think where I started is the insurance coverage is a contract between you and your insurance company. And we’re happy as a provider to be able to submit those claims to them on your behalf. But frankly, the amount that’s owed or what you’re paying in your premium and level of coverage was something that you did through your employer or yourself.

I think benefits literacy is an opportunity in our country. The book talks about that a little bit as well. And what benefits literacy is we shop and purchase our healthcare at a pretty rapid format. I don’t know that we look at things beyond maybe an in-patient co-pay or an ER co-pay or maybe a labor and delivery co-pay, maybe labs and things. But we’ll maybe get to five or six things that we think might come up—a script if you will.

Most healthcare is, frankly, not pre-planned for that. So, because of that, that sticker shock, it’s part of it, if you don’t arm yourself with educating what that plan looks like.

Some ideas on that are when employers are selling their plans, they go a little deeper in their discussion in terms of the benefit plan package and maybe run through some scenarios. I’ve seen some pretty innovative companies that we’ve talked through at TransUnion even have these health fairs, if you will. They kind of talk through scenario for a knee replacement or a typical broken bone in the emergency room or a childbirth or, God forbid, a cancer diagnosis and what that looks like across the benefit packages that you purchase so that you’re educating yourselves that you know that those things happen.

We all know what tires cost. And we all know what a plane ticket should probably cost and maybe a night out to dinner. And that’s because we go and do those things and we became familiar with it. We’re more savvy in that space. We aren’t interacting with the healthcare system as much. We have to kind of be proactive in that as we’re purchasing and using these plans.

There’s lots of tools and technology out there that can help through provider portals, through pre-service estimates, through benefit verifications and helping really patients as payers understand the level of coverage that they have and how it’s funding the care that they have or not and then what are those financing options going forward from there.

Mike: And in the book, you also touched on what I think are some perhaps less publicized payment types. Let’s talk about those for a minute.

So, can you talk about healthcare sharing ministries and how hospitals work with them?

Jonathan: Yeah! So, those are a pretty innovative—I’ll use that word—method. The ministry sharing plans, I think some of the very large churches in our country that could have a congregation of thousands of members, well they decided to create a health cooperative. It’s not insurance. It’s basically a—the closest thing I could think of is a health savings account, but it’s not. And there’s actually a lot of debate about these plans and where they fit because they don’t really follow a rule called ERISA, and they don’t really follow the tax code either. They’re kind of, believe it or not, pass the basket around the congregation when someone’s sick, and let’s try to fund it that way. And then, you could become a member of that by paying the church a membership fee. It’s not a premium. And you do that.

It works I think for the most part for stuff that’s pretty routine in nature. But you start having an adverse event—a motor vehicle accident, a gunshot wound, a heart attack, a neurological tumor, or something like that—you move very quickly from tens of thousands of dollars to hundreds of thousands of dollars. And so when that basket cannot cover that anymore, there is a gap between what it can do and what insurance can do.

Everyone loves to hate insurance companies. I work for one as well. They do have a role in managing utilization and cost to where healthcare is accessible to a consumer. In the book, I talk about imagining a world where you have to approach a provider with nothing and going and having to negotiate on your own behalf whatever the prices were. And they say, “Well, yeah, it’s $50,000 to save your life” or “$25,000 for this pill.” And I think self-pay patients are navigating that now, the uninsured. And that’s tough.

Hospitals will absolutely work with you and have you pay within your ability. But people’s lives can get significantly damaged financially from an unexpected medical bill. It’s still the number one cost of bankruptcy.

So, I think these churches have realized that they don’t want that to happen. It’s certainly a band-aid. I don’t know that it’s a solution. But it’s one that’s out there to where they’re trying to cost share across the congregation to fund their members’ care. It’s interesting though that they don’t have to pay or follow the rules that an insurance company or an HSA or an MSA would have to follow in those plans from what I understand.

Mike: Yeah, and you also touched on vouchers, Jonathan. So, what are some of the potential benefits of vouchers and how would they work if you were to go into some kind of a system that included those?

Jonathan: Yeah. I mean I’m a big fan of vouchers. And I think I’ll probably get into trouble for saying that. But I think part of the issue with health insurance now is that it’s not very portable. It’s typically attached to your employer or the government. You may have two or three choices in a model like that. But it really is the one that that employer has negotiated on your behalf or the government has negotiated on your behalf through the VA or Medicare or Medicaid, right? And those are your choices.

So, if you’re over 65, you automatically get Medicare. You don’t really have a choice to not get it. And you maybe be healthy, and maybe you want a plan that has more coverage, you can go to a supplemental plan or maybe a Medicare advantage plan or I think there are early retirement ones out there.

My point is that people automatically get that coverage in your employer group as part of your benefits package.

And so, what vouchers do is they kind of open that up to say, “I’m going to go and get coverage in an open marketplace to the place that I feel best represents my needs.”

We still have that benefits literacy hurdle that I mentioned before where we don’t want patients necessarily under-insuring themselves whether buying a cash plan that they can afford that has a $25,000 deductible, and they hope that that’ll never happen.

But nonetheless, I think it would open the market up to where if these vouchers were provided, I think folks would be able to look at the market, find a plan. We’ve got a lot of education to do there though to make sure that patients are buying a plan that’s going to meet their needs and then walking through those scenarios like you and I talked about in terms of, hey, you’re a 35-year old male, a plan that covers heart and cardiac work is probably not something that we really need to focus on, but one that covers orthopedic injury might be. And the plans need to tailor that too.

But we’re held legislatively to minimal essential benefits. And vouchers may help break that down.

We’ve heard just recently some of the tax reform things that have happened and some of the ACA stuff that we’re starting to see. Health insurance really was not designed to cover everything for everyone. And because we tried to make it that, it became extremely expensive and difficult to understand where, if it’s covering some things for someone, that changes some of that policy. And maybe vouchers is a way to get there.

It’s an extremely complex delivery mechanism. And I think vouchers are but one part of the solution. But I think that allows folks to have more choices and more competition in the healthcare space. And that allows more consumer experience versus “Hey, here’s your insurance plan. And here’s the network that you must go” and do what they tell you.

I think that creates alignment for care delivery, but it also restricts it down to that level of providers. And there isn’t a discussion about cost or outcome.

Mike: That makes sense.  Earlier on in our discussion, you did mention the section at the end of the book called Wouldn’t It Be Nice? And in there, you have several ideas for how to engage patients about the financial aspects of their care. Why don’t you tell us about a few of your favorite ones?

Jonathan: I think we talked about the airline one. Wouldn’t it be nice if we could board our healthcare like we board a plane? I think that’s one of my favorites. And that was just “Hey, if something happens”—and usually, it’s unexpected, i.e. I’m pregnant, I broke my leg, I sprained my ankle, I have a fever—I’m kind of a tech geek, and I follow that stuff pretty closely in terms of how technology could leverage that.

Think of how that could go, “Hey, I’m hungry. I want to go eat somewhere. Let’s look up a place,” and we start talking about apps like Yelp or Open Table or Trip Advisor, or “Hey, let’s go on vacation,” and you’re looking at Trivago or Orbitz or—you know the other ones—Travelocity, you name it. All those things have done is brought the services to the consumer. Healthcare could benefit from that too.

“Hey! Oh, you sprained your ankle. Well, which ankle? What type of sprain?”

There’s a lot of technology out there that’s really starting to let a patient self-direct. And a patient’s self directive on chest pain, that should be 911 all day long or a car wreck or things like that. But that’s, believe it or not, the minority of care, those really, really emergent things.

I’d say three out of four things that happen really are things that the patient could have some input as to where they could go get that care. About 25% of it are things where ambulances need to do it.

And so, I serve on the HIMS Revenue Cycle Task Force. And one of the things that we’ve talked about in there is the patient’s financial experience of the future to where you use your iPad or your Android phone and you’re like, “Alright, I rolled my ankle.” “Alright, which ankle?” and it goes through this path, and it’s like, “Okay. Well, according to your profile, you can go to any one of the following places: the emergency room, a primary care physician clinic, a hospital. And each one is this far away. This one has this long of a wait. This is how much it costs.”

TransUnion is inputting data into applications like that as well in our plans so that that will help patients understand what their costs are, what coverage they’re eligible for, those types of things. I think that’s one.

I think another one would be: “Wouldn’t it be nice if health insurance wasn’t so expensive and we were accountable to the amount of coverage we have?”

Those of us that have children, the example I have in that paragraph, if we have children, and they became a teenager and got on our car insurance, we knew exactly what happens, right? Our car insurance goes up quite a bit when a teenager becomes 16—not because it’s wrong, it’s because it’s a high risk thing.

Our insurance isn’t necessarily based directly on risk. And we as a society haven’t allowed for that. If you smoke cigarettes, I think that’s the only exception. But if your cholesterol or your alcohol consumption—we can list a bunch of other things—are in play, should that insurance be more expensive? I’m of the opinion that it should be. An insurance should reflect the amount of risk in which you’re doing it.

That’s how life insurance, home insurance, auto vehicle insurance, all the other insurances work. But health insurance in our country has some very interesting rules about how it needs to be an entitlement, if you will, to everyone. And that’s created affordability in premium, but I think higher out-of-pocket costs in deductibles. And some higher premiums, we start looking at exchange plans and things.

I think a third one—I don’t have the book in front of me, but a third one that was interesting, what I said was: “Wouldn’t it be nice if…”—we have a rule called EMTALA. “Wouldn’t it be nice if EMTALA didn’t exist?”

Well, what that one talks about is EMTALA Is the Emergency Medicine and Active Treatment Labor Act.  What that means is that when a patient shows up on a property of a hospital, the hospital is obligated to treat them regardless of their ability to pay. Great rule, right, with great intentions?

I think the rule itself on first blush is great. The issue that it presents is that patients approach emergency rooms a lot. And that hospital is obligated to treat them before they do anything. And so without payment or regard to level of care or anything, the care process happens.

And I think some lessening of the EMTALA rules or some clarifying of the rules would be able to say, “Hey, Mr. Wiik, you came here for a sprained ankle. You’re welcome to come back to the emergency room. We could bandage that up for you and do it, but it’s $1200. The urgent care across the street is $600” or “We have an urgent care here” or “Dr. Smith is right across the street. He’s an orthopedist. He’s got an x-ray machine. He could do it as well.”

But that triaging by level of care can’t happen under EMTALA directly. And it creates unintended costs and over-utilization consequences because of it.

And so, I said here, “Wouldn’t it be nice if we were able to treat patients at the level of care that they really needed versus to meet some sort of regulation in the book.”

Mike: And the book is an interesting read, Jonathan. If someone wanted to get a copy of it, where could they go?

Jonathan: You could go to Amazon and get it if you search my name. We are donating the profits to charity, which I think is great. It’s out there. The book is called Healthcare Revolution: the Patient is the New Payer. And if you search my name, Jonathan Wiik, you could find it on Amazon.

Go out and get it. People seem to really like it. It’s meant to make you react. And I think that was my intention in writing it, is that I wanted folks to kind of wake up and look at what’s happening with healthcare and understand that we have to take it back as a country and understand what those costs are and really hold the whole system accountable to what’s getting paid for from the patient, provider, employer, or government perspective.

Mike: Good thoughts! Thanks for joining us today on the Hospital Finance Podcast, Jonathan.

Jonathan: Thank you so much. Thanks for having me.


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