When There’s Common Ground on Health Care, Everyone Wins
Payers, providers, and employers are beginning to realize that their interests are the same.
One question obsesses us here at Rally Health.SM Why can’t finding a doctor be as easy as finding a hotel room or an airline ticket? You can do those things in seconds on your phone, wherever you are, whenever you want. Why can’t health care be the same way? We think it can.
We’ve talked a lot about Rally Connect, which is our doctor search and cost estimation tool that lets patients quickly find care nearby and see exactly what they can expect to pay for that care. We’ve built an experience that allows people to go from looking for care to actually getting that care, and providing accurate cost information as a crucial part of that experience.
Now it’s time to broaden the conversation to include cost estimation tools for hospitals and other health care providers. From a provider’s viewpoint, offering a cost estimation tool can fundamentally change the way they acquire new patients, treat existing patients, and improve patient satisfaction for both groups.
We’ve already enabled people to search for doctors who are compatible with their specific insurance coverage, and see their actual copays and deductibles. And using that information, we’ve been able to let them shop around to find the right doctor.
What we haven’t done until now is cross that final hurdle, which is to provide a unified experience that allows people to look for treatment, determine if their insurance will cover it, and find out exactly what their out-of-pocket costs will be. Right now, it’s as if a customer has to check into a hotel before they know how much it’s going to cost. Imagine a patient saying, “Hey, I’ve heard about this great hospital, and I want to go there. Can I choose that system, and what can I expect to pay?”
Traditionally, that process has been manual, and very time-consuming. Some providers have introduced online scheduling systems, but even with scheduling, you still have to fill out a patient intake form, and go through the insurance validation process, get an estimate, and so on.
By expanding Rally Connect for use by providers, we’re creating the ability to take all that friction out of the system and automate the whole thing in a digital experience.
To be clear, there have been some market obstacles in the way. When we began building the Rally products, we concentrated on insurers first, because they have the greatest scale and the greatest volumes, in order to build the foundation of the product. Now we’re expanding into the provider space because once we had a foundation in place, it got easier to take that capability and bring it to a market that’s not as easily scaled as the payer market.
One of the interesting things we’ve learned about working with providers is that cost estimation is not just about hoping that consumers use the product to become smarter shoppers for health care. That’s part of it, of course, but it’s also about making sure there are fewer unpleasant surprises at the end of the care experience. And the metric providers care about most, as we’ve heard again and again, is patient satisfaction.
Providers also want to ensure that they get paid the amount they should be getting from the patient, or from their insurance companies. A lot of providers today are suffering from death by a thousand paper cuts because of unpaid bills, or because of arbitration that results in them getting paid 40 cents on the dollar of what they’re owed, or sometimes even less than that, according to the Crowe Horwath report “Patient Financial Responsibility on the Rise.”
What’s worse, U.S. consumers place a consistently low priority on their medical bills, preferring to pay credit card bills, home and car loans, and even internet and cell phone bills before taking care of their medical expenses. This is even when they have sufficient financial means to pay them, per the McKinsey report “Revisiting Healthcare Payments: An Industry Still in Need of Overhaul.”
This seriously affects providers’ bottom lines. According to a December 2016 report in Modern Healthcare, faced with the “prospect of growing uncompensated care costs,” hospitals and other health care systems “will have to focus on improving collections and helping patients cope with increasingly high out-of-pocket payments.” The article says, “The key to surviving this era of high-deductible plans is to evaluate non-emergency patients before their treatment and communicate clearly with them about their prospective out-of-pocket costs.”
What happens when patients default on their debt and simply don’t pay their bills? The burden falls on the hospitals and other providers. A report in Becker’s Hospital Review found that just since the year 2000, U.S. hospitals have provided more than $500 billion dollars’ worth of uncompensated care. That’s half a trillion dollars hospitals are owed.
To deal with this growing problem, some providers are requiring consumers to pre-pay at the point of service. The good news is that providing reliable cost estimation may help. The McKinsey Health Care Payments report also found that a majority of patients would be willing to pay in advance — if they could see a reliable cost estimate first.
Cost estimation could also help maintain patient loyalty. There’s an old adage among car salesman that once a person walks into your showroom, you’re already halfway to selling them a car. It’s likely the same with health care: Once a patient is in a particular system shopping for care, they will probably stay there, rather than spend additional time comparison shopping.
Today, many consumers are often angry at the end of a care transaction, because it hasn’t been made clear to them that they are going to get a bill for a particular service. To use the car salesman analogy again, it’s like when you buy a used car, and there’s a whole lot of nasty surprises in the fine print that you weren’t expecting, so you end up paying a lot more than the salesman promised. That’s a bad experience, and it leads to bad reviews and low patient satisfaction.
As the Becker’s Hospital Review article points out, getting an unexpectedly high bill in the mail can have two undesirable consequences: It can result in the consumer giving the hospital a bad review, and it can lead to them simply refusing to pay the bill. Both problems can be addressed by being clearer up-front about what consumers can expect to pay, and what exactly they will get for their payment. Our goal is to partner with providers to help them eliminate that surprise.
There has been some resistance from providers regarding cost transparency. One of their biggest concerns is protecting the confidentiality of their arrangements with different payers. They might have different rates with one payer than with another, and they don’t want other providers to know what they’re paying.
So it’s important to be clear how we protect provider confidentiality. One way is by requiring a potential patient to enter valid insurance ID card information — they need to be an eligible member within that insurer’s system before we give them a quote. Just as Amazon verifies purchaser reviews, hospitals can ensure that the right people see the right price.
We’ve had to be willing to work with other client concerns as we move into the provider space. For example, one provider was hesitant about revealing their contracted rates. So we started by showing average commercial rates to their members. When the provider was comfortable with that, we added ID card information, then their contracted rates. That allowed them to become comfortable with the information we were sharing with people, and to realize that there are ways to do this that don’t reveal “state secrets.”
Right now the health care industry has gotten so focused on providing cost estimates to people that it has lost sight of the real story, which ultimately is about helping people get the best care for their needs. Giving them cost information is just one part of that. People want to know, “Where can I go for the best care possible? What’s the experience I’m going to have? And what’s it going to cost me?” Things like cost estimation and user reviews of doctors are all great, but they’re just part of the bigger picture, which is modernizing and improving the way patients interact with health care systems.
Providing a cost estimation tool on its own isn’t going to fundamentally change things for people. But providing costs as part of a better experience that allows them to easily deal with the health care system wherever they are, and setting realistic expectations to avoid shock or disappointment, will be the fundamental change we need.
Karl Ulfers is Senior Vice President of Product at Rally Health. For more on cost estimation tools for hospitals and other health care providers please contact firstname.lastname@example.org.
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