I recently read a post titled “8 Healthcare Topics to Watch in 2016” and one that caught my attention was that this is the year tech companies will push healthcare into the future based on moves by a couple of tech giants; Apple and IBM.
Apple has hundreds of developers creating health and fitness apps for consumers that track everything from UV exposure to reproductive and cardiovascular health. IBM is wrapping healthcare-related services and applications around its huge Watson Health business initiative. Further, “Big Blue” continues to be acquisitive in healthcare, having just bought Merge Healthcare, a medical imaging management platform company, for $1 billion. The company plans to use Merge’s technology with Watson Health to gain more insight from current and historical images.
And not to be outdone, the folks at Google Ventures (GV) now claim 31 percent of its investments sit with life sciences companies. That’s about $750 million GV has under management in that sector alone.
Such efforts should be applauded as consumers are turning more and more to technology to regulate every aspect of their lives. It only makes sense that they would look to technology to help them manage their health and often-times their ever expanding waistlines as evidenced by the popularity of fitness monitors.
Massive development activities and hefty investments in technology that advance the clinical side alone will not bring healthcare systems into the future. It may well further enhance the ability to diagnose, treat and prevent any number of medical maladies, but the industry will not move into the future if the other side of the healthcare house still operates with technology developed in the 1980s. The back office of healthcare, which the patient used to never see when insurance paid most, if not all of the bill, is becoming as important and prominent as the clinical side, and is just as important in the patient engagement equation.
While physicians and patients reviewing digital images in real-time from remote locations has become commonplace, the most frequent method to bill patients for services rendered still is to send a paper statement. While the exam rooms, labs, ORs, even patients’ bedsides are loaded with leading edge healthcare technology, the business offices haven’t changed their processes in more than 30 years. Piles of paper, postage and antiquated reconciliation are what is used to bill patients at most healthcare systems today.
The Medical Group Managers Association notes that more than three paper statements must be issued before any payment is received which is great for a statement vendor. However, the increased costs, potential for slow pay and its predictable impact on cash flow will be catastrophic for healthcare systems if they continue down this path. The Centers for Medicare and Medicaid Services projects out-of-pocket payments to exceed $393 billion by 2018 which means the “write offs” of yesterday are now very material to a healthcare system’s financial operations.
It is important to note that much of what healthcare needs to do to bring its business side into the 21st century has been developed by other industries and available today. Ask yourself, how many bills do you pay online compared to mailing back an envelope?
According to the USPS more than 60 percent of Americans raise their hands. In addition, my company sees 30 percent of patient payments coming from mobile devices. That quick and convenient payment method can’t happen with paper statements.
The Chief Medical Officer at any major hospital is very different from that institution’s Chief Financial Officer. The former has been given the “greenlight” to purchase the latest and greatest technology to address the clinical needs of the patients. The latter must fight to also get a “greenlight” to purchase and implement new financial systems on the business side that can reduce costs, improve productivity, cut account receivables and, not to be overlooked, raise patient engagement scores.
The chasm is wide. However, if you look at what IBM was able to accomplish with its financial services clients back in the 1980’s when banks were drowning in paper, closing the gap is not as tough as you might think. Financial services went paperless in an aggressive way to realize greater efficiencies and better margins. Today these efforts enable my 73-year-old father to do his banking and pay bills online.
To bring the business side of healthcare to a similar level the clinical side enjoys, as it regards use of technology, calls for a willingness to change and an internal commitment of both financial resources and forward thinking teams focused on automation. A real change for the better will yield mutual benefits to both the business and clinical sides of healthcare institutions, but more importantly also to the patients you serve.
Tom Furr is Founder and CEO at PatientPay, which offers online billing, collection and reconciliation services to enhance the productivity and profitability of inpatient and ambulatory healthcare organizations.