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HIStalk Interviews Jay Deady, CEO, Recondo Technology

June 15, 2015 Interviews No Comments

Jay Deady is CEO of Recondo Technology of Greenwood Village, CO.

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Tell me about yourself and the company.

Recondo has been in existence for about seven years. We have a SaaS-based single platform focused on revenue cycle and have built a series of modules or applications off that single platform. We commercialized the first product, Sure Pay Health — which does patient estimation — about five years ago. We’ve continued to add more functional modules since then.

I joined the organization as CEO in mid-November of this past year after originally being contacted around the HIMSS conference the prior year about becoming a board member. During the course of those discussions, it switched to both being on the board and an opportunity to run the company as well.

How would you differentiate Recondo’s offerings from those of its competitors?

When you say the words “revenue cycle” in the industry, it’s almost like saying “analytics” or “work flow” these days. It means a lot of different things to a lot of different people.

We take revenue cycle in three phases. The first is around patient access. The second is what I’ll describe as the mushy middle, where I’ve spent a lot of my prior experience and career in health IT — the ordering, the delivery of care, the documentation of that care, and the coding against that care. Then you have the back-office claims processing and the adjudication thereof. We have solutions in patient access and in the business office – we stay out of the middle for right now. 

We have a suite of products from patient access. We have a couple of competitors that have a suite. There’s a lot of niche players that might just do eligibility, payment estimation, or registration QA. We’re taking a broader suite approach versus a number of those more singular niche players in the market.

Do you see integration occurring between financial and clinical work flows that is tied together under the revenue cycle umbrella?

I do. In some of our more recent contracting efforts, it’s quite varied. Meaning, we have a really sophisticated back-end cloud engine where we have patented bot technology. We can go out to payer websites around what historically might have EDI transaction sets for eligibility and payment estimation, and then certainly on updating claim status. We can grab more information, create a superset between the EDI transactions and the additional information that we can grab with the bot technology, and run that through a rules engine and make it actionable. We can serve that information up in our own applications in work flow. That’s the way the majority of clients have contracted and deployed with Recondo.

But we also have multiple Epic clients. It has a fully-integrated patient payment estimator solution with their Cadence registration and scheduling products. We’re serving up the information I just described by enabling that product as a Web service.

In the past, there was certainly a lot of bi-directional HL7 integration. What we’re starting to see, in some cases, is API Web service enablement integration. For some of these applications, we might not be the front end, but we’re doing a great job with our back-end capability of enabling other solution front ends with more intelligent data.

Is revenue cycle management still a core competency for health systems?

The answer to that question varies by segments of the acute care market in the US, so I’ll answer it that way. I think we’ve seen in the past few years an increase in outsourcing in mid-sized singular institutions. They’ve increased their outsourcing. One, because of the competitive nature of getting resources. Two, are they really experts in that or should they focus on being experts in care delivery, and as it relates to coding and other aspects of revenue cycle such as claims and collections, can they outsource that to somebody who’s an expert at just doing that? We’ve seen an increase in that market segment.

Inversely, in the IDN and investor-owned market, we have a large relationship with Community Health Systems, CHS. They have consolidated 215 business offices out of their hospitals to six or seven regional centralized business offices. They have actually decreased outsourcing during that process. They are using some of our technology to help support more efficient automated processing versus what used to be more of a manual effort as it relates to claim status, processing, and adjudication.

I think outsourcing is alive and well in certain market segments, but as IDNs merge and try to consolidate their business offices, we’re seeing a trend to take some of that back.

Healthcare administrative overhead is high and yet revenue cycle is one of the hottest areas since hospitals have to jump through hoops to get paid. Will that become more streamlined with value-based care?

I think it will become more streamlined for two reasons. Historically, revenue cycle has been patient billing and HIS systems with some bolt-ons. But then a lot of personnel are required from the health system on the front end and the back end of the business office on what has historically been a lot of manual effort around some of that automation. As more tools from Recondo and some of our competitors continue to come to market, you’re seeing more aspects of the revenue cycle and work flow becoming less manual, more automated, with a higher percentage of claims going all the way through in a touchless fashion. That is contributing to a reduction in overhead.

Whether it’s under an ACO heading or some form of capitated at-risk bundle that takes many different forms, since they know how they’re going to get paid based on that value-based, at-risk package, it’s more about how they efficiently track, project, and manage costs against it versus the overhead of how do I get paid for the care I’m delivering. They understand what the denominator’s going to be. Now their question is, how are they going to maximize their efficiency in the health system against that denominator?

Are consumer expectations changing for the revenue side of healthcare and are ideas being brought in from other sectors that have more experience with deploying consumer-focused technology?

Absolutely. What has accelerated that more recently has been the Affordable Care Act, the exchanges, high-deductible plans, even private plans that are going to high-deductible plans. We have a high-deductible plan here at Recondo. The company contributes two-thirds of that based on people seeing primary care docs. It affects what our contribution is.

That type of plans, whether it’s through the exchange or through an employer insurance product, is causing people to not just take their healthcare coverage for granted. It is turning them into consumers, particularly in patient access. There’s a really interesting dynamic of understanding not so much the net price that will be paid for whatever the procedure might be, but the out-of-pocket price associated with it. It’s definitely now being viewed by the consumer differently.

There is a crossroads at the same time for availability or access. If I can save $50 to $200 by going to an imaging center versus having that scan done at an academic medical center, depending on whether I have a minor meniscus tear versus a blown-out ACL, how fast I can get in probably determines whether that $50 to $200 out-of-pocket savings matters to me.

There is an empowered consumerism that is accelerating. That’s going to change that whole upfront patient access, whether it’s through portals, but the convergence of scheduling availability with what it’s going to cost the consumer against those plans. It’s really driving some change in the industry.

Are health systems struggling with trying to get more intimately involved with their patients while at the same time pressing them harder for payment?

I think they are struggling a bit. Historically, they haven’t participated directly so much in it. Two, there’s been a number of companies in the industry and other players in the industry that have tried to disintermediate the actual providers. What I mean by that is there are pricing estimate tools, some of which have gone public with a lot of notoriety, and they have been targeting the major employers and in some cases the payers.

The larger IDNs, some of our clients that we do pricing estimations for now, are frustrated that the quality of the care they deliver as well as the pricing is being represented to the marketplace without their input. They’re taking action themselves so that they can start to present both a combination of quality and pricing on a direct basis versus allowing third parties in the health ecosystem to represent that information to the market under an apparent market fairness play, when in fact the pricing for a particular patient on a particular plan, looking at something that’s generically available from an employer or insurer website, could be off as much as 30  to 40 percent. That’s pretty frustrating to some of our largest clients, so we’re working with them so they can represent that on a consumer basis themselves.

For patients who have a provider choice, do they have enough information to make a decision based on value since there’s no published price that is the same for everyone?

The information is getting better. I believe you’re going to see providers provide a lot more of that information themselves. I’ve seen some third-party studies and we’re contracting some primary research ourselves. Depending on the economic situation of an individual, there appears to be somewhere between $300 and $500 from an out-of-pocket perspective that does start to impact location and care decision based on price. That seems to be the number where someone in Boston who typically go to Partners might go to CareGroup, for example.

I think it is based on the quality of the information. It’s based on a perceived confidence in a price that’s quoted upfront. It’s a lot easier, as we know, for a radiological imaging procedure than a major surgical situation, because once they’re in, what happens on the surgical table can vary quite a bit from what was originally scheduled. 

I think you’ll see a stepped in, service-by-service situation where the confidence of both the health system providing the price estimate and the confidence of the consumer receiving it passes what I call the Twizzlers test. If you go into the 7-Eleven to buy a package of Twizzlers and it’s $1.89, you don’t want to go to the register and then get hit with a 40 percent price change. There are certain service lines where the confidence can be high enough to pass that test. In others, for a while, it’s going to have a lot of variability to it.

I don’t think it’s going to all or nothing. I believe people from a service line perspective will step into this, both on the consumer and a provider side.

Hospitals have never been good at cost accounting and determining whether a given patient is profitable –they just know that if their market share and payer mix don’t change, that $5 aspirin will probably keep them in a financial surplus. How can hospitals quote a patient a competitive price for a given service when they don’t really know what it costs them?

I had with my team a lot of experience with that a number of years ago at Eclipsys when we bought EPSi. We did have clients who fully deployed that capability, and for certain service lines, got to a true cost accounting model.

As an industry, what accelerated that more recently with that tool and others and new ones that have come out –and some of those are going through IPO processes – is the whole bundling process. Whether it’s an ACO or other forms of capitation, in the beginning, they were probably bidding somewhat blind. If I don’t bid, I’m going to lose share, but I’m not quite sure if I’m going to make or lose money based on my bid. That’s accelerated a lot of analytics and cost accounting plays in the industry.

Compared to others, because of the longer-term historic nature of not deploying that, the industry is still a little bit behind. But in the last five years, based both on tools that are available as well as the changing market conditions, folks are making some pretty fast strides to close on that.

How will healthcare look different in five years?

Everything will continue to push as close to the patient’s home as possible. The furthest right on a graph of lowest patient satisfaction versus highest cost is an ICU bed. Advances that allow doing cardiac care and others laparoscopically and driving it into a clinic and ambulatory setting has been accelerating and I think that’s going to continue quite a bit. The trend of the percentage of physicians that are employed versus independent is going to push forward.

Consumerism, cost, and quality are becoming bigger decision makers that will force health systems and physician groups to market themselves and be accountable against. I see that rapidly accelerating, primarily because of the economic pressure from high-deductible plans as well as capitation bundles. That’s going to accelerate over the next three to five years as well.

Lastly, based on some of that, we’ve seen the historic ramp-up in annual cost to somewhat curtail. In general efficiency in healthcare, how the revenue cycle and care delivery gets more streamlined, I see that continuing to accelerate as well.

Do you have any final thoughts?

Recondo’s solutions are touching the consumer with our provider clients more directly. A fun aspect of my 26-year career is starting to work with clients on that consumer enablement, where historically I’ve been a bit more removed working with clients more internally focused from an EMR and revenue cycle perspective. Together with our clients, where they in the past may have been disintermediated by employers and insurers, putting some of these tools out faster, putting some of this information out. It’s going to be exciting in the next couple of years of helping our largest clients catch up and take control of that conversation with their patients and consumers.

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Reader Comments

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