In this episode, we are joined by two healthcare finance leaders to discuss important issues that affect the patient experience in the revenue cycle.Learn how to listen to The Hospital Finance Podcast on your mobile device.
Highlights of this episode include:
- Special guests Ryan O’Hara, Chief Revenue Officer at Northern Arizona Healthcare, and Scott Williams, Associate Vice President PRMO at Duke University Health
- What is being done to address the issue of patient frustration and what improvements are left to be addressed
- How the complexities of the healthcare industry affect the patient experience
- What the consolidation of payers and overall fewer payers has done to the patient experience
- How telemedicine has impacted the revenue cycle across health systems
- And more…
Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast.
I’m coming to you live today from the Revenue Cycle Leaders Forum in Frisco, Texas. And we’ve just wrapped up a few very productive days here at the forum.
And I’m joined by two revenue cycle leaders who participated in the forum. And we had some pretty interesting areas to cover and go over.
So first, on my left, is Ryan O’Hara who’s the Chief Revenue Officer at Northern Arizona Healthcare in Flagstaff, Arizona. And on my right is Scott Williams, Associate Vice President PRMO at Duke University Health in Durham, North Carolina.
Gentlemen, welcome to the show.
Scott Williams: Thank you.
Ryan O’Hara: Thank you.
Mike: So, over the last couple of days, as I’ve mentioned, we’ve covered a lot of ground. And I thought we could focus on a few areas that really affect the patient experience in the revenue cycle because that seems like a major focus of what we’ve covered here.
So, first off, patient frustration was an area that came up, things like determining eligibility early on, determining financial responsibility. The patient is getting several bills maybe from different providers that were all part of their care experience at the hospital.
And so, I’m interested to hear from both of you what you’ve done maybe in your institutions to tackle some of those issues or where you think there’s areas for improvement and what you’re striving to achieve.
Who wants to kick this off?
Scott: This is Scott. I would say a couple of things in particular that we’ve all collectively tried to focus on, not just at Duke University, but certainly the entire industry. One is doing a better job at patient estimates, trying to provide a picture ahead of time to the patient of what their responsibility is going to be and providing some greater clarity on that from an education perspective. And then, that drives to a certain extent our ability to collect on those balances also but it’s really more about patient education satisfaction.
So, trying to do that estimate, easier said than down in a very complex healthcare environment—easier to do, for example, in a dentist’s office because there’s fewer services involved than in typical larger healthcare organizations.
So, certainly, part of it is patient estimates.
The other part, I would say, that most of us are trying to focus on is just making the interaction with the patient with the revenue cycle easier. And typically, for most of us, that’s trying to do things more online rather than person-to-person or phone call to phone call, a 24/7 experience where patients can go online to see their bill, pay a bill, schedule an appointment, look at their medical records, set up a payment plan, see their clinical outcomes.
So, the more we can do of that, the easier it is. Certainly not every patient is going to engage on those opportunities, but a fair number of them are. And it’s all contributing towards how to complement the clinical experience.
Mike: And we talked about some of the difficulties around that I think, even just scheduling, which seems pretty innocuous, right—we’re going to have a schedule up, you pick your time—but it’s not. The example someone gave was what about the doc or the orthopod that wants left-handed patients on Tuesdays, right? How do you get that knowledge into that scheduler?
Scott: And you’re right, it is taking very complex organizations and trying to simplify them to a certain extent so that they make more sense for the workflows and the patient expectations. The patient doesn’t really much care about how we’re organized internally. They’re coming to each of us as healthcare providers to address a healthcare need. And how do we put ourselves into it from their perspective?
Mike: Right! And Ryan, you’ve talked about the patient as a customer this week—not necessarily thinking about them as the patient or the beneficiary. What does that mean for Northern Arizona Healthcare?
Ryan: Yeah. I think I’ve really kind of changed—I mentioned this in the media. I don’t really think of healthcare almost as an industry anymore. In my own mind at least, I segmented it into the service industry.
And kind of to Scott’s point, we’ve typically built our construct around the customer experience. The tagline could be something like this: “Come get high cost care on our terms.” That’s kind of the way it’s always been. And I think Scott brings up some really good points of we’ve got to start saying, “How do we get you the right care at the right place at the right time? How do we do it at your terms instead of always on our terms?”
I mean, there’s always the analogy of the waiting room. The name itself implies inefficiency. It’s a room where you’re going to go sit and wait for us to do the many things the way we want to do them until we’re ready for you.
And great service companies don’t think that way. They think, “How do we create value? How do we create a value proposition?” I think that’s what it really goes back to—how do we create a value proposition around the delivery of healthcare so the customers choose to opt in and to spend their money on that as opposed to other things.
And so, we’re certainly trying to do a lot of the same things Scott is doing in terms of just trying to say, “The way you are going to access healthcare is not going to be on our terms anymore, it’s going to be on your terms—or at least on mutual terms,” right? You still have insurance at the middle of it. So you’ve got to get the authorization worked up and that kind of thing which is really a service delivery to the consumer as well because we don’t want them to bear unnecessary responsibility, nor do we want to take unnecessary loss of revenue for delivering care that hasn’t been authorized because, whether we like it or not, insurance is at the middle of a lot of this stuff.
Mike: So, let me just ask you a follow-up question to that. Certainly, healthcare is complex. And all of us here and all of our listeners know that. But other industries are complex too.
I mean if I can get online and look at my airline seats for today and change my seat, maybe even change my flight on an app, what’s holding healthcare up?
Scott: I think part of it is the complexity. You’re right, there are plenty of other industries that are complex, but how we choose to deliver services and delineate them creates some of that complexity.
Right now, there’s a fair amount of legislature at the federal and state level to have providers list their charge masters online. That transparency makes a lot of sense at the first level of review. It does I think to all of us in the industry. When you dig down deeper, you realize the complexity.
And for Duke University, for example our charge master is 125,000 items that are unfortunately are not very listed very coherently. Things that patients say, “Well, I want to know how much it is to get a knee replacement… deliver a baby… get an MRI,” 125,000 versions of that make it so much more complex.
Even something as simple as I twisted my knee, I need to get an MRI, “Well, with or without contrast?”, we in the industry know what that means. The average patient is like, “I have no idea what that means there.”
And so, information overload is part of the challenge.
And I think the onus is back on us as an industry. How do we simplify those charge masters? How do we make them more straightforward simple? How do we provide education to our patients, our customers, because they don’t want it delivered in that fashion.
So, our challenge is how to get from here to there.
Ryan: And I think there’s absolutely some truth to it, but there’s a bit of a cop-out to it as well. Insurance is at the center of all this stuff. And that’s true. But I think one of the biggest things in terms of the complexity—and you can talk about your charge master, and I can talk about my charge master—is that I don’t know of another industry where charges don’t mean anything.
Our charges really don’t. They’re the negotiating point with insurance. When you go and buy groceries, you go and get your oil changed. The charge is the charge. You know what you’re paying. Here, our charges are not charges. And the construct is kind of polluted that way. And I think it adds complexity to it.
Again, insurance is at the center of a lot of that and why we do it. But they’re not the only ones to blame. We’ve got our own housekeeping we’ve got to take care of too.
I think that’s probably the biggest complexity. People just can’t understand that a charge is not a charge.
Scott: It is a great point. And truth be told, the average patient doesn’t really care what the charge is. What they care about is what their portion of responsibility is going to be. It can be a million dollar charge, but if I owe $20, what I care is about the $20, not the million dollars.
So, how do we translate that? And you’re right, the complexity that Ryan is describing, because we all have different contracts with our different payers, and typically the money really getting exchanged between payers and payers and providers is a tiny fraction of those very inflated list prices that tend to play out in the media.
Mike: So, let’s talk about payers in a little bit more depth. There’s probably some revenue cycle wish list around that that we talked about. But what’s the reality there? We’ve got hospitals that are contracted with maybe a couple of dozen health plans at a time depending on your area and what’s going on. And then, in the inside of that, there’s all kinds of different contract terms and things that you have to comply with.
What would the world look like if we had fewer payers or maybe even a single payer? Would that conceivably help make the revenue cycle better—a better patient experience, in a sense, through the revenue cycle? Or is it more of a matter of trying to standardize the constructs of what insurance would cover and how it will cover it and how it would pay for it, so it’s simpler as you move from plan to plan?
Scott: So, certainly, in our industry, over the last 10+ years, some consolidations have been occurring on the payer side; the same way that’s been happening on the provider side. Large providers and large health systems are buying up smaller community hospitals and private physician practices. So there’s consolidation on the provider side, consolidation on the payer side. And each one of those trains are changing how the balance of power between providers and payers sometimes in a good way, and sometimes not necessarily in a good way, from a patient perspective which is where we’re all trying to keep this angle going.
The relationship between providers and payers, from my perspective, is relatively complex. We’re both trying to deliver the care or the healthcare needs that the patient needs but doing it different ways. And we’re both trying to control that relationship with the patient.
I mean that really is what’s going on in the industry right now—providers want to maintain their relationship with the patient, payers want to maintain their relationship with their members. And we’re not at complete crosshairs in terms of what’s going on. But it is a competitive relationship there.
And there’s a reason why providers call them third-party payers. We think we’re the main relationship for the patient. It’s those third-parties that are getting in the way. And the reality is we both add value, but it is a competitive relationship. And certainly, payers gradually are getting—we see in our marketplace that payers are adding providers to their organization and growing horizontally as well as vertically which is a different competitive environment. And certainly some of the large provider organizations are becoming self-insured and getting into insurance produces.
So, there’s some blending of the relationship there, but that is the dynamic that’s playing out.
Mike: Is the consolidation of payers and fewer payers a benefit to the patients do you think? Or when you think back, a greater variety of payers, was that a more competitive environment, an environment where it costs less maybe or it added more choice? Did that add something to the patient experience?
Scott: I think it does a little on both sides. Fewer payers from a provider perspective may make things more administratively simplistic. Not dealing with a hundred different payers and their rules rather than 400 different payers and their rules is certainly better.
If you take it all the way down to a single payer system, there’s some other factors that play into this. So I would know that a single payer is necessarily the solution to administrative simplification.
In our industry, certainly electronic transactions defined by ANSII standards with claims and payments and authorizations eligibility, that’s add a certain standardization that, in theory, all payers and providers follow regardless of how many payers and providers there are. That’s added to some degree.
But there’s also the perspective of a fewer number of players in the industry, whether payers or providers, means there’s less competition. And the less competition there is, that general probably is not a good thing for customers and patients.
So, I think there’s a healthy balance of having few but not one in the industry that would be good for patients.
Mike: What’s your take on it, Ryan?
Ryan: Yeah, I mean I kind of made a wild statement here at the forum yesterday. I would prefer zero payers. Now, I don’t think that could happen nor will it almost from the same reason the automobile industry wasn’t allowed to fall on itself. If healthcare represents 20% of our GDP, which it does, then you’ve got to reckon that insurance represents a statistically relevant part of that 20% as well. Can you let that percentage of the GDP collapse? No, you can’t.
But here’s what a zero payer system conceptually would do. It would get rid of those fake charges that we’ve talked about earlier, right? It would now allow me to deal with you just on a cost margin basis. And I’m now responsible for delivering a service to you. And I decided that my profit margin, that I go after is x, let’s call it 5% for this thing, and then I just start working with you.
I mean, you could still do the same kind of HSA-related stuff that most insurances your employer provided you, to have them even participate and bear some of that cost. It could be shared the way most of them are too and say, “I could put in instead of $400 towards your health premium, I’m putting $400 into a health savings account. And that is there for you when you need to access healthcare, when you chose to access healthcare.” Again, I think it would lower the water level by—if you think about the industry—billions! And then, when you lower the water level by billions, you could then start making healthcare more affordable potentially.
But that’s all pie-in-the-sky. That’s not going to happen, I don’t think. Insurance still is at the center of what we’re doing.
But I think Scott makes a good point. And when we were whiteboarding things out yesterday, that was one of the things—insurance thinks of what I call customers as their beneficiary, providers think about customers as their patient, revenue cycle peers might think about them as a guarantor. But why can’t we just interchange all that with customer, customer, customer, and create a shared value?
I think that’s where we’re all just kind of off with insurance. We have not created any sort of shared value proposition. It’s about them—and I don’t mean them in an adversarial way, but it’s an adversarial relationship. It’s about them trying to oftentimes not pay out what they should because of both rules that are created by both them and CMS that we have to adapt to.
But wouldn’t it be great if we just somehow got to that shared trust to say, “Listen, I don’t even care what your operating margin is an insurance company. It’s going to be way, way better than mine, but that’s okay because that’s what we chose to do. But to say, “What’s the shared value?” to just take the noise out of this and lower the water level for everybody.
I think by actually lowering the water level, insurances could still make better operating margins than they’re doing, but it’s a game that we’ve all decided to participate in which is, “We’re going to just line item deny you and create an amount of work and because we create the rules that you then have to adapt to. And we hope you don’t adapt to them all the time.” And that’s not what’s best for the customer.
But part of it is we all look at that customer as something different to us. Wouldn’t it be great if it was shared and we all saw them as our sick monitor, our sick child, our sick friend instead of a guarantor, a beneficiary, or whatever.
Scott: I think the other big issue, probably for us a whole that’s driving where the industry is going more so than the number of payers and the number of providers and where that consolidation, those trends end up, there’s what’s occurring with payment reform.
The bigger issue is, right now, in a fee-for-service environment, regardless of how many payers and providers there are that drives all of us towards certain behaviors—some of them, productive, some of it less so—as the payment methodologies and payment reforms starts to occur with paying more for quality or value, however that’s defined, that’s going to change fee-for-serving paying for quantity to paying for quality.
Now, whether it ever ends up with something as pure right or wrong capitation or population health and the rest of it, that’s what’s going to drive how payers and providers work together to take care of the needs of our customers. That’s an unknown, and that’s a scary part for all of us—scary, but as well as an opportunity. And I think the challenge for all of us is how do we adapt to the fact that that is coming down the pipeline.
Mike: And you’re adapting to greater out-of-pocket costs for patients, right? So, are we seeing a move for insurance—obviously, there’s a cost driver there. Is that going to change the mentality of patients, customers in the marketplace to thinking about insurance almost truly as insurance is, it’s catastrophic, right? I mean car insurances, it’s not prepaid repairs. You don’t think of it that way. You use it if you have to use it. Health insurance, are we going to start thinking about it that way? Or are we still a long way from that?
Scott: I would argue it’s already started ahead in that direction. I mean when you look at the Exchange programs, the healthcare reform that came out three or four years ago, most of them, they have huge deductibles, right—$2500 to $6000 deductibles. When you have that set as a deductible, you don’t have health insurance. You have exactly what you described, catastrophic coverage.
Now, whether that’s the wave of the future or not, certainly payers right now use patient responsibility as a throttle on volume. Right or wrong, that’s what they’re hoping to achieve. And that works for some patient populations, but not for others.
And so, I think the payment methodology of the future is going to have to get beyond that to figure out how do we get patients/customers to have enough skin in the game to change their behavior.
Part of healthcare in the United States is our customers, our patients taking that on themselves rather than the healthcare industry being entirely responsible for their health.
Ryan: Yeah, I think that’s an astute point. It’s something I’ve kind of talked about for years. Why is healthcare insurance different than all other insurance? That’s what other insurance is. It’s meant to keep you from bankruptcy. It’s catastrophic by nature. And I certainly that that’s where healthcare insurance kind of started to go if not fully there. I mean I don’t think anybody can say their benefits were as good as they were 15 years ago, their health benefits; it’s just not. But that ship has sailed.
But yeah, I think it gets back at least personally to me to that conversation of could it just be a relationship with the consumer then at that point, right? I have a good or service. In our case, it’s a service that you want, and you’re willing to pay X. And it just becomes more transparent.
Mike: And more realistic because you’re not going to send a patient your charge master rate on your bill, right, because that would be impossible for them to cover. You’d have to come up with a realistic price…
Ryan: …and less sort of real. I mean, for instance, we’re $1.7 billion gross organization, and that’s $700 million net. That doesn’t make sense to anybody else in any other industry. “Wow! Your gross revenue is $1.7 billion.” “Yeah, but our net because there’s just this noise. There’s just this noise in there.”
It’s a good point to kind of recognize that, at some point, in the ‘70s or ‘80s or something, healthcare insurance became something that was just supposed to pay for it, and now it’s something that was supposed to keep you from catastrophic financial burden.
Mike: Yeah, yeah. No, it makes a lot of sense.
There’s this one other area I want to touch on briefly before we break. And that’s telemedicine. And obviously, that’s something that’s burgeoning now. They’re trying to figure it out, different regulations in different states. There’s a lot of different viewpoints on that.
I’m just curious, in your own geographic areas, have you seen an impact at your facilities? And if so, has that dropped to the revenue cycle yet?
Ryan: I think telemedicine is, at its core, healthcare on your terms, the customer. You want to access care this way, we should give you an option.
Personally, it is probably an experience that I deal with more at Northern—and a healthcare that certainly you probably deal with in Durham—is my most vulnerable population and the population that I can service best via telemedicine is my Native American population.
If you know anything about Northern Arizona, the northeast corner of that state is the largest Native American reservation in the country. And we consider that a very important service area to us because you can’t pick and choose nor would you ever want to what your service area is.
That’s the population that I could best serve via telemedicine and the population we best try to serve via telemedicine. The problem with that population is reliable connectivity. It’s a huge problem.
And so we’ve got machines sitting in Tuba City and elsewhere on reservation land (sometimes, we don’t even know where the machines are). And even when we try to use them, they just don’t work. I think it’s great for the well-to-do person who says, “I don’t want to go sit in a clinic. I would rather just pick up my phone and have a consult with my doctor.” And I’m sure the doctor would love that. They would be able to knock out more visits. And that, from our standpoint, they would be helping more people because that’s why doctors get into it. I believe that.
The problem for me with telemedicine is that vulnerable population that you could serve, that kind of remote population that you could serve, you run into technology issues of the technology working, the delivery of the kind of medicine that you actually would even want to do just because mostly of connectivity than other things.
Scott: And in our experience—every place across the country has a little bit different experiences. And certainly, in some parts of rural North California, we have a little bit of what you described.
But in most of the case where we are in North Carolina, we have decent connectivity. I look at it and say telemedicine is a great idea, has always been a great idea. The technology to support telemedicine honestly has been in place for 20+ years. It has not grown to the extent that it ought or need to, again, because providers and payers—and they both have skin in that game—have not worked well enough together to say, “How can we make sure this is appropriate?”
In our environment, too many payers—in fact, very few payers—will actually pay for telemedicine which, you look at it and you say, “Well, that’s crazy! It’s so much a lower cost of healthcare. Payers ought to be pushing this on us saying, ‘We demand that you do a certain amount of telemedicine.’ Instead we haven’t had any coverage policies.”
And I think the payers are worried about utilization going through the roof if you make healthcare access so easy through telemedicine. So, there are two sides to that argument there.
In our environment, because so few payers are reimbursing it, we decided to go down the path of saying, “Even if payers aren’t going to reimburse it, we’re going to do it in cases where we can lower our cost,” I mean follow-up visits for surgeries, for example. The more we could do that by telemedicine, even if we’re not going to get paid, the more we can free up spots for other patients that have a greater need for that care besides a, in theory, relatively lower risk follow-up visit from a surgery and the rest of it.
So, we’re trying to pick and choose. But it is crazy to think how much technology is available and yet we, as an industry, are not yet taking as much advantage of it as we could.
Mike: Ryan and Scott, it was a great discussion here and certainly a great couple of days of discussion. I appreciate your view points. Certainly, we’re in changing and exciting times. Thanks for joining us today on the podcast.
Scott: Thank you.
Ryan: Happy to do it! Thanks for the time.