Category Archives: Patients

Online bill pay starts to accelerate in healthcare

Cough it up

Cough it up

Back in the good old days patients’ out-of-pocket responsibility for healthcare costs was negligible. Remember the $5 office visit co-pay, just as an example? As a result hospitals and physician offices set their billing and collection systems up to work with health plans and government payers. Consumer billing was an afterthought, bills were hard to understand and to reconcile with insurance company statements, and collection rates were low. No one really cared if the patient paid or not.

Out-of-pocket costs have gone up dramatically for most commercially insured patients, especially the increasing number who have high-deductible health plans. Providers have realized that this is an important revenue source but in general tools for billing and collection have lagged. Providers that have focused on this area have often used heavy-handed methods such as being forceful about demanding payment upfront and referring overdue accounts to collection.

A handful of startups have seen the opportunity and gotten into the space. They have made the process more consumer oriented, with the idea of improving collection rates, lowering administrative costs, and increasing patient satisfaction with the process. I’ve interviewed the CEOs of two such companies, Simplee and PatientPay.

This morning Simplee announced a significant milestone: the Simplee Pay platform is collecting over $1 million per day and the company expects to have collected a total of over $1 billion by the end of the year. Simplee makes a number of plausible claims: 80% of patients pay right away, 40% move to self-service, 15% use mobile for payments, and collection costs drop by more than 10%.

I’m glad to see Simplee succeeding.

By healthcare business consultant David E. Williams, president of Health Business Group.

The folly of high deductible health plans

Now that's what I call value-based pricing!

Now that’s what I call value-based pricing!

They used to call high deductible health plans “consumer-directed” plans. That was before people realized there is nothing particularly consumer driven about them. A recent poll –not the first of its kind– shows that people with high deductible plans tend to forego care. In fact they skip both unneeded and needed care. Most people don’t like the plans so much when they get sick.

Naturally the current negativity about high deductible plans is mixed up with discussion of the Affordable Care Act, aka ObamaCare. The lowest tier Bronze plans have cheap premiums but high deductibles. This very typical article on the subject (Skipped Care A Side Effect Of High-Deductible Health Plans) from the Seattle Times comes complete with the requisite Republican representative trashing ObamaCare. What this article and almost all similar ones miss is that low income people should purchase Silver tier plans. Not only will they receive valuable premium subsidies, they’ll also be eligible for cost-sharing subsidies that reduce out-of-pocket costs, thus neutralizing the usual criticism of ObamaCare. (By the way, details like this are why the law has a lot of pages in it.)

In the private sector things are different and worse. Employers that offer high-deductible plans are effectively penalizing their low wage employees and rewarding those with high incomes. That’s because those with limited incomes are more sensitive to the high out of pocket costs. They’ll self-ration and hold overall medical expenses down. Meanwhile, high wage employees won’t be nearly so affected. High income people I know who have high deductible plans just don’t think hard about avoiding the out-of-pocket payments. Their premiums will be lower than they should be because utilization is held down among the lower wage folks on the same plan.

Meanwhile, the high deductible plans are totally ineffective at cost containment once the relatively low out-of-pocket maximums are reached. For example, anyone having even minor surgery will blow right through the maximums and have no incentive to keep a lid on costs after that.

A better approach would be to offer policies that reward patients for using efficient providers and provide a premium rebate to those who do.

photo credit: theamericanroadside via photopin cc

By healthcare business consultant David E. Williams, president of Health Business Group.

 

California law prevents price-gouging of the uninsured

Hospital bills add up fast

Hospital bills add up fast

Medical bills are a major source of personal bankruptcy in the US. One reason is that hospitals typically bill uninsured patients wildly inflated “charges.” These prices are often double or triple the negotiated rates that insurance companies pay or that Medicare pays for the same services.

Historically hospitals defended this practice, claiming they needed high prices to compensate for the fact that few uninsured pay their bills, or even claiming to be prohibited from discounting to those who lacked a contract. There’s some truth to the first claim, yet the punishment fell upon those conscientious folks who actually tried to pay what they were billed.

As a new Health Affairs article (California’s Hospital Fair Pricing Act Reduced The Prices Actually Paid By Uninsured Patients) states:

“The pricing policies of US hospitals leave the most vulnerable patients least protected from high medical bills.”

California passed a comprehensive law to address this issue in 2006, effectively capping prices for moderate income uninsured patients at Medicare rates. According to the author’s analysis, the impact has been substantial. Hospitals have reduced their prices to the uninsured; low to moderate income patients have benefited.

The findings are important, because while the federal Affordable Care Act also addresses the issue of pricing to the uninsured, its provisions are much weaker. For example, nonprofit hospitals have the discretion to determine who is eligible for discounted charges and for-profit hospitals are exempted from the requirements.

My own view is that it’s especially important to regulate prices that are charged to uninsured people who are not covered by the ACA, such as undocumented immigrants.

I have less sympathy for those who are eligible for coverage but choose to remain uninsured. Ironically, the threat of ruinous hospital bills could be just what we need to encourage everyone to sign up for coverage.

photo credit: urbanbohemian via photopin cc

By healthcare business consultant David E. Williams, president of Health Business Group.

 

Zynx’s Siva Subramanian discusses care transitions and the IMPACT Act of 2014

Siva Subramanian, PhD. SVP, Mobile Products, Zynx Health

Siva Subramanian, PhD. SVP, Mobile Products, Zynx Health

Siva Subramanian, PhD is an expert in mobile health technology and care transitions. He’s the founder of CareInSync, now part of Zynx Health. In this podcast interview we discuss:

  1. Why care transitions are so important
  2. How value based payment approaches are affeting how providers approach care transitions
  3. The Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014
  4. How CareInSync addresses care transitions
  5. How CareInSync fits into Zynx’s broader portfolio
  6. What we can expect in the care transitions world over the next few years

By healthcare business consultant David E. Williams, president of Health Business Group.

 

In praise of FDA collaboration: the cardiac safety example

Making it happen

Making it happen

The Food and Drug Administration gets a lot of grief. Some think the FDA is too restrictive, keeping useful drugs and devices off the market and thus harming patients. Others complain that the agency is too lax, letting dangerous products get through. What many people don’t realize, however, is that FDA has established an excellent track record of collaboration with stakeholders that’s leading to better, faster development pathways.

I’m directly aware of FDA’s longstanding constructive, collaborative efforts in the areas of HIV and HCV through the Forum for Collaborative HIV Research. Those efforts are now expanding into liver fibrosis and beyond.

So I was encouraged to to receive the following correspondence over the weekend from Mikael Totterman, founder of iCardiac Technologies, where I’m a board member.

On Friday, I attended the Cardiac Safety Research Consortium meeting hosted by the Food and Drug Administration announcing the results of a new study that promises significant advances and improvements to the way cardiac safety is assessed for new drugs being developed by pharmaceutical companies.

It was a great opportunity to review  over a decade of work that had gone into enhancing one of the key areas of drug development and to reflect on how industry and government collaboration can lead to dramatic enhancements for all parties, especially patients.

Where It All Started – The FDA’s Critical Path Initiative

Back in March of 2004, the FDA launched the Critical Path Initiative to “drive innovation in the scientific process through which medical products are developed, evaluated and manufactured.” The document identified broad critical bottlenecks in drug development that, if tackled, promised to deliver significant improvements to the process of developing new drugs.

Specific Opportunities – Cardiac Safety – Traditionally Very Costly and Hard to Assess Well

By March of 2006, and as result of broad-based industry support, the FDA continued their collaborative work, and rolled out a highly targeted list of specific opportunities for industry collaboration to improve the overall effectiveness of drug development.

One of the key areas highlighted by the FDA across several specific opportunities was how drugs were assessed for cardiac safety issues, specifically for the potential to cause potentially lethal cardiac safety side effects.

“#18. Predicting Cardiac Toxicity. New tools for early identification of cardiac toxicity would improve product development for a wide array of conditions. Research investments that could produce tangible benefits quickly include creation of an ECG library from clinical trials that could be used for identifying potential early predictors of cardiac risk.

#46. Identification and Qualification of Safety Biomarkers. …For example, a robust database of preclinical and clinical data on cardiac arrhythmic risk could help us understand the clinical significance of QT interval prolongation, reduce the need for clinical studies, and, possibly, help identify individuals who are at risk for this side effect….”

Cardiac Safety – Consortia are Born

The level of interest in these opportunities was intense and so two separate industry/FDA consortia were developed to provide a venue and process for validating tools and methods that could tackle the issues in cardiac safety.

The Cardiac Safety Research Consortium was formed in 2006 through an FDA Critical Path Initiative Memorandum on Understanding and the Telemetric Holter ECG Warehouse was formed in 2008.

Significant Progress Unveiled at Cardiac Safety Research Consortium Meeting at the FDA

The Cardiac Safety Research Consortium meeting this past Friday was particularly exciting as it was the culmination of many years of work on the part of the FDA as well as many industry participants and thought leaders.

As the recommendations from the meeting are rolled out, the expectation is that cardiac safety testing in clinical trials will become ever more thorough and at the same time accomplished at a lower cost.

This is something that everyone should celebrate; patients, drug developers and regulators are all better off as a result of this long-term collaborative approach.

photo credit: ePublicist via photopin cc

By healthcare business consultant David E. Williams, president of Health Business Group.

 

Do you understand your medical bills? I don’t

Piling up the bills

Piling up the bills

The Consumer Financial Protection Bureau has issued a report that indicates that at least 43 million people in the US have unpaid medical bills. That has consequences since unpaid medical bills hurt credit scores, often substantially. Tellingly, many of these ‘debtors’ don’t have issues with any other creditor.

The report concludes that many non-payers simply don’t understand their medical bills.

I have a confession to make: Even though I’ve been working as a healthcare business consultant for more than 20 years, I don’t understand my bills either. Here are a few of the problems I face –and I know I’m not unique:

  • Providers send bills while insurance claims are still pending, so I don’t understand whether I’m being asked to pay the right amounts
  • Explanations of benefits from my health plan aren’t timely and aren’t informative. The services described sound completely generic and are hard to trace back to the provider bill
  • We now have a high-deductible plan and are being asked to pay more by our providers, but I’m not confident that providers are correctly taking into account our out-of-pocket maximums on an individual and family basis
  • Providers aren’t coding claims in line with the Affordable Care Act or insurance company rules, resulting in incorrect out-of-pocket amounts. (See my recent piece on the on again, off again co-pay for a routine physical)
  • Few providers (at least around here) allow online payments. I have to either call the office during work hours or mail in a check –both a hassle

I’ve said before that unpaid medical bills shouldn’t be counted for credit scoring purposes. And it appears that FICO has also come around to that way of thinking. Still the big problem is that the whole payment system is way too complex, expensive and confusing.

I understand that providers need to get paid, and increasingly that means collecting from patients. There are companies out there, like PatientPay and Simplee, that try to make this process easier. But we’ve got a long way to go.

photo credit: urbanbohemian via photopin cc

By healthcare business consultant David E. Williams, president of Health Business Group.

An expensive $25

One of the most visible benefits of the Affordable Care Act is that preventive services are covered with no out-of-pocket cost. So I was happy not to be charged a co-pay when I visited my doctor’s office for my routine physical in April. Not that $25 is a lot of money in comparison with my premium, but hey I’ll take it.

So I was unhappy when I started getting bills for a $25 co-pay from the doctor. I used the patient portal to send an administrative note in May, which was ignored. After a lot of back and forth with the office and my health plan the charge was finally dropped yesterday. But it makes me wonder just how much money the physician’s office and health plan spent to push this $25 around.

This is just one small example of the administrative costs imposed by the US’s convoluted healthcare financing system. Here’s the play by play from my case:

August 29, 2014

Dear [Physician Practice]:

I keep receiving bills for a $25 co-pay for 4/4/14 date of service. This was a routine physical. Under the ACA I am not supposed to be charged a co-pay for this preventive service, which I confirmed with BCBS MA. I sent a message about this months ago on the provider portal but have never received a reply, just more bills.

Please reverse the charge.

Thank you,

David

——

September 2, 2014

Good Morning Mr. Williams,

Thank you for your email inquiry regarding the balance of $25, for service date 4.4.14.  Upon review of the account, I confirmed Dr. X billed a medical office visit in conjunction with the annual physical.  Per the Affordable Care Act, you may still be required by your insurance company to pay a copayment if the physician treats you for any new medical issues discussed during the physical, or if she needs to change medication, order tests, or refer you to a specialist to deal with a pre-existing issue.  I have attached the ACA for your review.

 I have taken the liberty of asking our Medical Coder to review Dr. X’s medical notes for your visit on 4.4.14.  She will determine if the documentation supports the charge of the office visit.  If it does not, then and only then, will we reverse the charge.  This may take up to 7 business days.  I will email you as soon as I receive this back.  Please let me know if I can be of further assistance at this time.

Kind regards,

[Practice Administrator]

—–

December 1, 2014

Good Morning Mr. Williams.

This email is in follow up to my email sent on 9/2/14, regarding the balance of $25, for the service date 4/4/14.  Our medical coder determined Dr. X’s notes do not support the office visit.  Therefore, we are refunding your insurance company and reversing the charge.  You may disregard the statement.  Please let me know if you have any further questions.

Kind regards,

[Practice Administrator}

By healthcare business consultant David E. Williams, president of Health Business Group.