It may be the blackest of black boxes.
The pandemic, with its public health fears, has trained a spotlight on the labyrinth of the healthcare industry — specifically, billing, the mess of codes and charges and paper statements that puzzle patients and have providers chasing cash flow.
It’s no secret that as deductibles rise, a greater share of the healthcare burden falls to individual patients.
And, as relayed by the American Hospital Association (AHA), COVID-19 has boosted hospitalizations costs. It has also led to canceled services, to the point where in just four months the U.S. healthcare system has lost more than $202 billion. Every dollar counts, of course, for providers.
Lack Of Transparency
But for the patients, transparency is lacking. Late last month, a group of unions, business groups and policy institutes wrote to congressional leaders to champion a provision be included in the next stimulus legislation to curb “surprise” medical bills.
“We urge you to end surprise medical billing for all patients through the implementation of fair, market-based payments for out-of-network charges,” the letter to lawmakers said.
Understanding what’s owed — much less collecting on the roughly $375 billion that patients are on the hook for each year — is a problem that long predates the coronavirus.
In an interview with Karen Webster, Florian Otto, CEO of Cedar, an online patient engagement and billing platform, said, healthcare billing is an opaque and paper-based process that can benefit from customization and use advanced technologies to modernize the experience. That’s especially critical since, the way things stand now, only 40 percent of every dollar is collected by healthcare providers, according to Otto.
Indeed, allowing patients to resolve their bills can boost provider collections by at least 30 percent, Otto said.
Otto told Webster the company got its genesis in a 2016 incident: His wife fainted and had to go to the emergency room. “She swiped her credit card” to cover the co-payment. Then the paper bills, statements and collection notices started, one in particular for a lab bill that never came.
“She never received that lab bill,” he noted, adding that to get a glimpse into healthcare’s pain points, “just look on Yelp or Google reviews. The number one [healthcare] problem is billing.”
The company’s flagship Cedar Pay combines data and machine learning to connect patients and providers to help craft customized bill plans and messaging (through, say, email and texts) to help providers get paid. The company also enables digital insurance capture, which flags missing or incomplete insurance data, and that can improve collections efforts.
“Basically, we interact with the patients on behalf of the provider,” said Otto. “There’s, of course, a lot of sophisticated technology in the background, but at the front end where the patient interacts with, it’s actually very simple.”
Personalized Messaging And Payment Plans
In terms of mechanics, Cedar sends individuals a text message on email to confirm an appointment, put in all demographic information and upload their insurance card.
Late last month, Cedar said it raised $102 million to further its platform to coordinate the patient experience beyond billing to patient engagement — that starts with and moves beyond pre-visit registration in an upstream manner. Asked by Webster about the recent capital raise, Otto said “the majority of funds will go into product engineering” and to hire staff with experience in healthcare data science.
“We can do the verification of, and eligibility checks, of the insurance. We could tell the patient how much the co-payment will be, give an estimate of the payment, if it’s a planned procedure, and then give them basically a reminder on the process and then [what] will happen during the visit and then post-visit. We engage on the billing side,” he said, likening his company to the connection between the patient and the healthcare system. For now, after the medical visit, the bill gets generated, Cedar reaches out to the patient and notes that, for example, the patient owes $200. The consumer can click a link to review the charges, to set up a payment plan or pay in full (Cedar works with third-party payment processors).
“We are a hundred percent focused and obsessed with what is the least friction for the consumer and what makes the most sense for the consumer. It makes no sense for the consumers to go to a provider and get a bill from a third party,” he said.