The Healthcare Payments Innovations conference held recently in Arizona was a reminder of just how much work is still to be done if we are to effectively automate healthcare payments processing and expedite related-exceptions resolution. Our medical banking solution has a role to play here, which is likely why I was asked to participate in a panel on EOB conversion. But I came away from the conference with a sense that we are not yet gaining sufficient ground on this problem.
Various presentations included familiar but still daunting statistics on the nation’s healthcare woes:
- The percentage of the U.S. Gross Domestic Product represented by healthcare expenditures hit 17.9 percent in 2011.
- Total health expenditures per capita in the U.S. are growing annually at a rate of 3.9 percent.
- Operating costs eat up more than 60 cents of every healthcare dollar.
- It costs more than $16 to process a healthcare transaction by mail and $8 to process one through the Electronic Data Interchange. That compares to the $2.50 spent to process a transaction at a brokerage branch and the 27 cents it costs banks to process a transaction through an ATM. Banks process Internet transactions for just a penny.
Some of the solutions suggested included adoption of system-wide data and transaction standards, monthly health statements instead of individual EOBs, cards to validate patient eligibility, and, of course, paper suppression. These ideas are getting better, but so many have been tried before. To find better ones, it might be helpful to look not just at the problem but why it’s been so difficult to solve. Here are three reasons I see:
1. This problem requires extensive cooperation among four constituencies: payers, providers, banks and patients. So far, there is no financial incentive for those four groups to come into alignment.
2. Outside pressures exerting influence on the medical payments problem are many and varied, and include government in general but in particular procedure code changes, diagnosis code changes and other modifications.
3. The target keeps moving. This is to a great extent the result of healthcare reform, which is only now making its full impact clear. This target may start moving even faster.
We continue to see opportunities — healthcare-specific lockbox services, reconciliation services and patient payments — for banks to help their provider customers address some of their most pressing business challenges. My earlier article details those three opportunities for banks in the context of the changes brought by healthcare reform.
Our medical banking platform matches bills with payments through data collation and aggregation, leading to greater visibility and faster payments. It’s not the whole solution, but it’s one of the many it’s going to take to solve this very expensive problem.