Tell me a little bit about your background and about The Verden Group.
Primarily I come from the provider side of things. I’ve worked for hospitals and small group practices from surgeons to pediatrics. I spent a long time there. Then I went out as a kind of independent consultant in a lot of process improvement stuff for physician practices. I ended up at United Healthcare for a couple of years, focusing on managing the provider side of things, looking after the network and tracking of physicians, being somewhat of a physician advocate from within.
About two years ago, I left United Healthcare and established The Verden Group. The idea behind The Verden Group was twofold. One was to continue the consultant services that I had started a few years before that. The other was to try and bring together information in such a way that it would be usable for physician practices.
It seemed to me, from the United Healthcare side, that there really was a disconnect between what insurance companies were communicating and how they were communicating, and what physician practices, hospitals and obviously the providers of care were actually doing in terms of being able to see that information, understand that information, and act upon that information.
The Verden Group was born as a way to take information flows and make them usable by what should be the receiving party. What makes that so difficult is that most insurance companies simply post changes on their Web site. Those changes take the form of everything from updating medical policies to updating payments and administrative policies. Some of these just post a notification on their Web site and some of these Web sites are a thousand pages deep, so it’s very difficult for providers of care to really keep themselves updated with all of the different things that are changing but can’t find it on the site.
Even when they do look at, say, a newly posted policy, it’s very difficult for them to interpret what it actually means, how it actually breaks down in terms of how they are supposed to bill, how are they supposed to code things, and what they are supposed to be doing in terms of providing care.
What we do at The Verden Group is something called the Verden Alert system. Providers of care subscribe to this service. They give us their e-mail address, their specialty, and the insurance companies they participate with. From there, we match them up with all the changes for these insurance companies.
We track 186 insurance companies nationally, 75,000 Web pages that we’re actively monitoring every 24 hours to pick up any of these changes. We break them down into what specialties they actually belong to. The insurance company themselves don’t break down by specialty. It’d be really nice for me to go to an insurance Web site and look under cardiology and see everything that applies to me. Unfortunately, it doesn’t work that way because a lot of medical policies apply to multiple specialties.
So we take this information, massage it a little bit, break it out into the individual specialities, and then further break it out into categories: administrative change, clinical change, formulary change. Then obviously our subscribers only receive the information that’s relevant to them. So if you’re a pediatrician participating in Oxford, Cigna, Aetna, and United, you’re only going to get information relevant to pediatrics for those four insurance companies.
It’s really not much incentive for insurance companies to be too user friendly because if practitioners don’t take the time to look up these obscure changes, they’re probably going to have their claims rejected.
You got it.
Insurance companies could do this if they wanted to.
That’s exactly right. There’s two schools of thought on this. If you talk to anybody at the insurance company, they’ll say, “No, no, we’re committed to transparency and getting this information across.” And you look at it and say, “Well, if that was the premise that you were coming from, then why haven’t you figured out a better way to do it,” you know?
We’re seeing pieces here and there. The insurance companies are doing things like rapid updates, where you can sign up to get e-mail alerts every time they publish their newsletter. Unfortunately, a newsletter may have data that’s three months old, letting you know that three months prior, in the previous quarter, they implemented a whole bunch of policy changes that are now showing up in your inbox in the form of denials on your explanation of medical benefits.
That’s really how insurance companies make money. If they don’t have to pass through the premium dollars, then they get to hold onto much more of it. There are some that say, “No, no, we’re working for transparency. We really want this to work better.” But at the same time, they have not organized themselves well enough to actually prove that is the case.
They’ll say things like, “We’re trying to keep costs down by posting it up on our Web site. It means we don’t have to mail things and that keeps the cost of healthcare down. It’s an efficiency tool as opposed to anything more sinister than that.” You look at that and say, “That may be true in one regard, but it also works to their advantage.” So it really is a double-edged sword.
When we launched the Verden Alert, we had some mixed responses. There were some insurance companies that called up to make sure to make sure we were tracking them. They wanted to make sure that they were part of the Verden Alert because, “We want to know more about your services and we want to be part of this.” There were others that really were very suspect and wanted information about what we were doing and why; how we were managing the policy information, that sort of thing. They really wanted to protect their own interests a little bit.
Every quarter, we rank insurance companies. We grade them in terms of transparency. What is their clarity of communication? What is the notification period? Are they making changes 30 days before they implement them, before the effective date? What’s the cost to the provider? Things like adding prior authorizations onto medical policies. That’s obviously adding costs for physicians. Moving around criteria, making it more complicated to actually get paid for services. We pick them up on points for that.
We started ranking insurance companies and, very quickly, we were seeing which insurance companies wanted to engage and say, “OK, how do we actually move the dial on our rankings? How do we do better because we want to be perceived as a company that’s good to business with?” And others that simply wanted us to go away.
It’s a little ironic that some of the insurance companies have invested a lot in information technology, but in the form of keeping things more secure than making it easier for people to use.
How similar, or not similar, is what you do to what athenahealth does?
Athena does it a little different. What they are tracking are claims. They are looking at lines of data with claim sets, what they pay, how quickly they pay, what percentage is disappearing down the rabbit hole, and the percentage you’re getting denied.
They’re really looking at it from the claims perspective only, which is very reactive in a way. Everything comes back to them after physicians and primary care have actually billed out those claims. They can modify their engines based on what comes back so they’re capturing the edits that way, but their ranking system is really based on this reactive data.
What we’re doing is getting a jump on the insurance companies and being proactive, in terms of saying, “OK, we are now looking at your policy decision-making, your strategic decision-making really, and we’re tracking how that’s playing out.” So in addition to our rankings and really being able to quantify what they are doing, we are also able to have a bird’s eye view in terms of how these strategies are playing out.
We see various insurance companies pick on specialties. We see which specialty is going to be targeted on or dragged in on for cost saving quarter-to-quarter. Last quarter, the ophthalmologists seem to get hard hit by a number of insurance companies that applied a bunch of medical policies and put in a lot of prior authorization stuff. The quarter before that, we were seeing a lot of stuff in oncology and cardiology, so they are very often the hardest hit anyway. There’s an awful lot of activity around those specialties.
We’re almost able to gauge what will happen the next quarter based on how they’ve done financially. You see the profits begin to tank in one quarter, so you think OK, next quarter we’re going to see a whole round of prior authorizations, notifications, referrals. All of these administrative burdens go into play because that means it will be more difficult for providers of care to utilize those services and actually have those members take advantage of those services and for them to get paid for it.
All of a sudden an insurance company institutes a referral process or a prior notification on that. You’ll find the person will get their treatment, but the person who rendered the care is not able to get reimbursed on that. They realize that there’s been a policy or procedure change and then they adjust themselves. But it means that the insurance company had that 30-45 day window of these services that they don’t have to pay for because they can point to the policy changes and say, “Sorry, that was effective on September 1st. You should have checked the Web site or known magically that there was some kind of change here.”
If you like, it gives you the opportunity to do something about it, such as actually engage with medical directors at these insurance companies to say, “This is a bad policy. We don’t want this to go on your site.” For example, the American Academy of Pediatrics is very active, but some of their users are Verden subscribers and they really love the fact that they can get this information ahead of time, give them the jump on things, so that they can go to these insurance companies and say, “Wait a second. What do you mean you’ve decided that developmental a screening is part of the E&M code and not separately reimbursable?”
So do you think insurance companies are basically fighting and winning a war with providers by out investing them on the technology side?
I think it’s a very unlevel playing field. I think physicians really haven’t invested in the technology that they need. They haven’t even invested in the processes that they need to keep up with the technology. So you have very well-capitalized, well-funded insurance companies that are able to take advantage of all sorts of Web technology and put a whole bunch of stuff on the Internet.
The typical practice has maybe four physicians in it. You have somebody at the front desk who has a high school education, who really isn’t terribly savvy about accessing information and being able to utilize things like online eligibility and verification or claims adjudication. There’s a real disparity between the educational level of the folks that are working in physician offices compared to other folks that are in these insurance companies.
With that nice capitalization obviously comes the best and the brightest. With physicians, its kind of like, “OK, we’re paying $10 an hour,” depending where you are in the country, for folks to meet and greet the patients and take care of some of these things. So you have a real disparity there.
I think insurance companies really use that to their advantage instead of them dealing with physicians and saying, “Look, we’re bringing out all this neat stuff. Let us come into your office and show your staff how to use it, or let us put forward unified platforms across insurance companies where there’s one way of doing certain things.”
It’s simply not there. Each company has built out their own ways of doing things and than expects physicians to comply. If you’re an insurance company doing what you’re doing, I guess you get real fluent at that. If you’re a physician and you’re participating with 10 or 15 different insurance companies and you need to do the same things 10 or 15 different ways, you begin to see how very complex it becomes. Even though there is a lot of fairly easy to use technology there, it really becomes very cumbersome on behalf on the providers of care trying to actually utilize and access those information systems.
So is there any hope for a small practice that has minimal staff, other than just not accepting insurance?
Ha. Well, that’s certainly one way to go, to just say, “We’re not gonna deal with this.” I think that there are more and more smaller practices that are really having to go down that road.
There are a couple of things happening. They are either becoming cash-only businesses and limiting the number of patients that they have; they are merging because they need to stay alive somehow; or they are really hitting the wall. We hear, particularly in primary care, that they can’t cut it between the reimbursement rates being as low as they are and then the high costs involved with managing all of these different plans. They really are isn’t any margin left for these physicians. That why we’re obviously seeing fewer and fewer doctors going into primary care more and more into specialties.
I think the hope, though, is being able to move the educational dial, so to speak, on physician practices. Finding ways of getting education in front of them so they can understand the world of managed care. That’s really where that huge canyon stretches. The doctor’s focused on providing medical care. The staff and the office are focused on meeting and greeting patients, getting patients in and out of the rooms. If you’re in the billing department, that’s about the only touch point that you have with the insurance company. So being able to get information in front of them in such a way that they can understand what’s going on.
Unfortunately, sometimes I’ll have conversations with physicians that’ll say, “Why do I need to know about medical policies? How does that affect me?” The single biggest thing that’s going to affect your reimbursement are these policy changes. They’re really unaware even of that.
They don’t read their insurance contracts. They just sign on the bottom line and say, “OK, I just have to take this plan. I’ll just sign the contract but I don’t understand it anyway. What’s the point in reading it?”
I think if there are great efforts made to really educate physicians about the business of medicine, then I think we can have a real groundswell that will help turn the tides. For the last 10-15 years, it’s been about how much the insurance companies could take out of the system. That’s really what it’s come down to. Being the middlemen that they are, they’re the ones that make all the profits of this deal.
Certainly there are some physicians and some specialties that are doing just fine, but if you look at healthcare across the board in the United States, obviously you don’t need to be a brain surgeon to understand how much trouble we’re in. The expenses that are attached to healthcare, predominantly, is attached to the profit that the insurance companies are making out of the deal. The premiums that people are paying aren’t being passed through to the providers of care.
So you have these providers of care that aren’t able to understand the business of medicine. They aren’t able to engage on a level that says, “Wait a sec. This doesn’t work. This is not what we want to see happen here.” And consumers aren’t able to engage on that level either. I mean, even if you just read your own benefits package, do you know what it’s telling you? Can you understand what is actually covered and what isn’t? Of course not, because it really is made as convoluted as it can be and, of course, the insurance companies retain the right to change these at any time, which is why there are all these policy changes.
We’re processing anything from 600 to 1,000 policy changes a month. Some months it’s double that, depending on whether it’s close to the end of the quarter or not. It’s a very dynamic environment where the insurance companies are constantly moving the goal posts. Consumers and physicians really can’t keep up, so the only hope is that can come in there is in the form of transparency and better education.
When we talk about things like consumer-directed health plans … as well as being adopted, it’s failing miserably. It’s being adopted so the employers can get their costs lower, but in terms of the people that are on the receiving end of those plans, they don’t realize they have $3,000 deductible before their benefits are going to kick in. They don’t have the $3,000 to meet those deductibles, so they are simply not acquiring care.
They’re not able to shop around because there isn’t pricing transparency with the insurance companies. One of their single biggest proprietary pieces of information is their fee schedule. So you can’t say, “If I go to the Dr. Smith down the street, it’s going to cost $200. If I go to Dr. Jones in town, it’s going to cost $100. Therefore, I’m getting something worthwhile by keeping that $100 in my pocket.” There just isn’t the transparency there between the physicians and the insurance companies and the consumers.
It doesn’t operate like anything else. There’s nothing else in any other industry to compare this to, this complete opaqueness that has occurred with the insurance companies. There’s no transparency in pricing; no transparency in contracting; no transparency in rules.
It’s really pretty under-regulated. It depends obviously on which state you go to, but here in New York State, they’re really not regulated in terms of being able to change their premiums and pricing any time they want.
There’s a bunch of things that need to happen for there to be some hope that the healthcare system can survive in its current form, but it has to come in the form of transparency. The only way it can be more transparent is by getting better information and better education out of the insurance companies.
Employees think they have healthcare, but what they’ve actually got is health insurance that pays less and less of the cost. If there was a total restructuring of the system where the insurance companies were left out of the picture or made less profit, could people afford healthcare even then?
I think we’ve seen the tipping point. We have finally seen the insurance companies kind of fall off a cliff, where they have gotten so overzealous with their pricing that their market has really shrunk.
Earlier this year, we heard Angela Braly, the CEO of Wellpoint, the biggest insurance company in the country, saying that they will not sacrifice coverage for profit. Basically meaning, “We will continue to price as high as we need to make good profits and we don’t care if fewer and fewer people are covered,” which really goes against the central philosophy of why the insurance companies are there in the first place. They are there to be able to cover people, so it really just shows you where the large, publicly traded insurance companies are at in terms of their culture.
But their membership has been shrinking and shrinking. United healthcare alone in 2008 has lost 750,000 members. That’s a huge number of premium-paying customers. And so it looks like the market is shrinking very severely for them, so they are coming out with a lot of these products that are really bare-bones products. The employers are saying, “Now I can still offer a plan to my employees, but at less cost to me and with greater costs sharing for them and higher deductibles, but I’m still able to offer that plan.”
People are really beginning to catch on that what they are now cost-sharing for, what they are now kicking in part of the premium on, and what they’re now having to pay these massive deductibles on, really gets them nothing for their money. So you have a real call in the consumer arena beginning to come in the form of, “We want options. We want the ability to purchase our own health insurance because it gives us greater control in terms of what we select for ourselves and what we’re willing to pay for.”
That said, there are so many people that can’t afford healthcare. The typical premium for an average family of four is close to $13,000 a year. If you have even just two parents working at $35-40,000 a year, that’s a tremendous amount of their income that’s going on just healthcare insurance alone. So I think the restructuring has to come in the form of paring it back to insurance. It’s no longer an insurance vehicle.
What we’re doing right now is paying insurance companies for the privilege of holding onto as much of our money as possible. What we need to be doing is saying, “This is an instrument that should operate like any other insurance.” You pay a modest premium for the unlikely event that you my end up catastrophically ill. If you want to pay additional, so you have things like well care covered, your annual visits, those sorts of things, you should be able to add that to the policy of that’s what you seek.
Certain states mandate that certain things have to be included in insurance companies that you may or may not use but you’re paying for. Insurance companies that are basically pointing to an underwriting cycle saying, “Yeah, we might be making massive profits this year, last year, and next year. But in five years, we might not be, and therefore, we need to really stock up on our reserves to make sure we can manage that.”
We need to start looking at: what is the purpose of insurance? What actually needs to be covered? How can people actually go about purchasing insurance for themselves that actually works for them? What are the products that need to be available and out there, and how can we understand what those products are?
Let’s keep it simple. Let’s not talk about benefits that have 10 tiers to them, where you have drugs that have four different tier levels. If your doctor prescribes you this, it will cost you $5, or if he prescribes you this, it’ll cost you $50. There’s just far too much complexity in it. It’s time to simplify it once again and bring it back to being a insurance instrument rather than the financial world that it’s become.
On that note too, a lot of insurance companies now are looking to becoming banks. Wellpoint has investigated having part of its company actually listed as a financial institution. They wanted to get into banking and the reason they want to get into banking is for HSAs, health savings accounts, because they realize if they control the money that is in those accounts and they can make a percentage on that, they can also charge for the management of those accounts. And then they’re also in charge of what they are actually going to pay the providers of care. So it means they lock up every single dollar potentially that is available in that healthcare pool coming from consumers to insurance companies.
You mentioned that few medical students are going into primary care. How can we fix the problem where doctors have to do more procedures to make more money?
I think that’s precisely what we’re seeing in primary care. It’s a thinking specialty. It’s not necessarily a doing specialty. Specifically, pediatricians. They’re having to see more and more patients faster and faster, just to keep the volume up to be able to meet the bills. But what they really are doing is this encounter base as opposed to performing procedures, being more procedure-based.
We really are seeing the death now of preventative medicine in the United States. Part of the shift has been because insurance companies found it a lot easier to be able to cut reimbursement to pediatricians, to family practitioners. They’ve really taken a lot of money out of that system. They’re not paying for those sorts of things. And so these doctors have a low incentive to go into these specialties in the first place. They have a much higher incentive to go into things like anesthesiology or cosmetic dentistry, those sorts of things you get paid for and you get paid handsomely.
At the same time, you have insurance companies putting dollars into things like disease management programs and pay-for-performance and quality measures. You look at that and say, it’s fine that you are quantifying and measuring these things, but unless you’re going to put money into those things, ultimately what you are doing is paying for catastrophic care. You’re paying for illness to be treated as opposed to preventing illness in the first place.
Some insurance companies seem to be waking up a little bit to that, but are still focused on the high-dollar specialties. They erode the preventative medicine as close to the bone as they could. It wasn’t just cutting the fat, it was actually cutting to the bone in terms of primary care while they pursued other initiatives in the specialty care.
They’re looking at oncology drugs and formularies and all of those sorts of things. It’s almost like they took their eye off the ball and didn’t realize that they really are game-changers in terms of how care is going to be delivered in the United States. If you’re not paying for certain things, then the delivery of that stops. If you’re not investing in preventative medicine, then the delivery of preventative care goes away. And that’s where we’re at.
Even if the insurance companies turned things around tomorrow, just looking at any of the data coming out of our medical schools in terms of physicians going into primary care, you’ve got this huge gap. It’s going to take at least a generation to fix. If we had folks going into medical school today that had decided they were going into primary care, they’d still have to go through the four years of college, internship, and all those sorts of things before they’re coming out into the world of owning our own practices and delivering that care back to society.
So there’s a real time lag that we should all be very rightly concerned about that the insurance companies have by dint of their policy-making and their strategic decision-making have actually created this situation for us. Part of the mission of The Verden Group is being able to track that strategy and see how its playing out and being able to get that information in front of medical societies and regulators and various other entities that we work with, to basically say, “Hey, you’re going down the wrong route on this strategy. If you’re going to throw million of dollars into measuring diabetes care but you’re not going to pay primary care physicians to actually spend the time educating the diabetic and following up on the treatment of that care, you’re going in two different directions at once and wasting a lot of money with that.”
That’s the neat thing with being able to work with these medical policies and these administrative policies. We’re getting a jump on the way things are going to play out in the next quarter, the quarter after that, and the next year, for example, based what we’re seeing in terms of where the revenue is flowing and how difficult it is for physicians to be able to provide care and get these services to people that need them.
So to answer your question, where do we go from here and can insurance companies really turn this thing around? I don’t think that they can. I don’t think that they should any longer be trusted to do that. They have driven the market. They have driven care in this country to a very precarious place.
It’s really time to take back that responsibility to stop continuing to pay hand over fist. For what? For payment of services? We can figure out a better way to pay providers of care. It doesn’t have to go through an insurance company that really has a vested interest in holding onto that money and making decisions that are going to be very contrary and the health of society at large.
What do you think the motivation of insurance companies is when they offer to subsidize electronic medical records or they offer personal health records and patient portals?
In many ways, they have to do that, in terms of being seen as progressive, to engage the consumer, to really show that they want to partner with the people that are in the business.
But electronic medical records are a really difficult thing for physician practices and providers of care to really implement well. Just having an electronic record doesn’t do much for you. It’s only the implementation and how it’s used. So unless you have the level of sophistication with the folks that are actually going to use the system, the systems themselves are relatively useless.
It comes down to: what’s the purpose of it? How is it going to be used? How easy is it to be used? Can it actually be fit into delivering care to the patients, or is it simply that something that the insurance company built that looks good, that gets them some kudos to show that they are being good responsible citizens, being part of this IT wave to make these things more accessible?
I think there obviously a lot of benefits to electronic records. Just being able to have your own personal history depending whichever physician you need to go to. There is a real value component there to being able to manage care more comprehensively. That’s certainly goes without saying.
But having an insurance company offer to implement and make available those electronic medical records raises a couple of questions. Part of it, too, is that physicians are very reluctant to want to participate in programs such as that, because what happens if you want to drop that insurance plan? The more insurance plans tie you up in their network, the less able you are to extract yourself from that, so you may end up making very large concessions such as lower and lower rates because now your medical record system in your office is tied to this insurance company. How do you break away from that?
You also then have a responsibility to abide by the insurance company’s demands in terms of how that information is used. What are you signing up for and what are you trading off in order to actually have that medical record in your office? So I don’t think insurance companies are the right people to be offering those sorts of things. I think they do it because there is a certain amount of goodwill that may occur with it.
But also, they need access to data. Right now they rely on claims data. That’s how they are getting their data. It’s very expensive for them to audit paper records. And so, when they are doing these pay-for-performance programs and looking at various things that way, they are really relying on the quality of the claims data that’s coming through.
We see that is really a problem too, because if you’re a doctor and you don’t know much about the business of managed care, and you’re just checking the box on a code but you don’t really know what that code represents, and you’re not keeping yourself up to date with coding and changes and how your CPT and ICD-9 code combinations should go along, pretty soon the information that you’re submitting to the insurance company that you’re getting paid on really isn’t representative of what you’re doing.
Further, you may not be billing for certain things because you know they are not paid for, rather than having to write them off every time. You just stop billing for them, such as developmental screening or visual activity screening, these sorts of things, so they don’t get captured. And so the insurance companies are grading you based on the quality of your claims data as opposed to the quality of your actual charting.
If they have access to that medical charting, they can link these physicians in, it gives them another source of data to pull from to really see what is actually being provided to patients. So that could be another angle to it in terms of what they’re doing and why they’re doing it. It doesn’t look like there’s too many insurance companies that are offering to make medical records available to physician practices anyway at this point.
What about the ICD-10 coding system?
I think the ICD-10 coding system is great in terms of getting to a greater level of granularity in terms of being able to really accurately pinpoint what those disease classifications are. It’s been around for a decade or more. I think England adopted it in ’99 or ’95 or something. It’s been around for a long time, but again, it comes down to education. I don’t think there’s been enough education around this so that offices are really going to able to accurately code and use them.
You’re going to find, I think, that folks are going to end up with a lot of denied claims, so it obviously benefits insurance companies, but a real problem for the physicians until they figure out why something is denied. If you call an insurance company and say, “Why was my claim denied? I need you to explain this to me,” all they will tell you is you billed with the wrong code. They won’t tell you what the right code to bill with.
From their perspective, they are saying, “If we tell you the right code that gets you paid, who’s to say that’s the actual code that you needed to use because that may run contrary to what the diagnosis was from that person?” So I understand the hesitation, but there isn’t a transparency there to basically state, “For CPT codes XYZ, these are the applicable diagnosis codes that go along with that.” That piece is missing. So how are these doctors officers really supposed to digest, absorb, and then use the ICD-10 coding?
If you have a good practice management system, you’re in luck, because a good practice management system used with technology can help you code better. If you punch in three digits instead of five, or five instead of seven, you know that there may be other options there and you can search through and pull up the right code. But again, there’s going to be this steep learning curve for physicians to do this.
Ultimately, though, I think it goes a long way to being able to capture with more specificity what exactly the diseases are, what exactly we’re seeing in healthcare and being able to record that more accurately. I think it’s necessary just for societal programs, being able to really pinpoint how chronic disease like diabetes or ADHD, these sorts of things.
We think we’ve got some good data, but again, it’s relying on what physicians have coded to date, so how detailed is it? How robust is that data? Adding ICD-10 to the mix doesn’t add anything by dint of just adding it. It’s really how is it going to be used? And if we don’t spend a lot of time and energy in educating physicians on how that should be used, then once again, we’re only getting halfway there. We’re not actually able to take advantage of what something like ICD-10 can do for us.
What technology should practices use that they typically don’t?
There’s a lot of tools out there that insurance companies make available, such as verifying eligibility. There are plenty of tools available where someone at the front desk can key in your number, pull it up, see what your benefits are. In a perfect world, that person would have a conversation with that patient about what their benefits are, what their deductible may be for the day, and really be able to utilize the information that they’re seeing.
We’re not seeing doctors’ offices take advantage of that, and part of the reasoning is they don’t participate with just one plan. If it was just one plan, it would be fine. But if you’re participating in 15-20 different insurance plans, you’re not going to learn 15-20 different systems. There are a few aggregators like NaviNet that have 10 or 15 different insurance companies. It may be a lot more by now, I’m not sure. But you have some aggregators where you can key in and it will pull it down from different insurance company Web sites.
I think if there were a much better job done in terms of having a consistent platform that all these insurance companies had to conform, rather than having one physician office having to conform to 15 different ways of doing something. I think we would see the adoption of technology uptaken an awful lot faster at these doctors’ offices.
We’re all human, right? You learn something once and you stick with what you know. You’re not going to take the time to actually learn how to do different, over and over, the same sort of thing done differently over and over again. And then to keep up with how all these things are changing – it’s really an enormous task, I think, for a lot of these doctors and their staff.
The technology is available, it’s just not in a way … again, it comes down to information, but also how this stuff is put together. It’s available, but it’s very difficult to actually adopt even in the simplest case of eligibility, because of the fact that there is just such variation across the spectrum of insurance companies you might participate with.
If you look ahead 5-10 years, what changes do you think will happen with regard to reimbursement in practices and what could change in healthcare that will have a technology impact?
Well, I’m hoping that, in five years, we’re going to take the insurance companies down and reshape the landscape. I think at this time we don’t have any other choices.
From a technological perspective, I would hope that within five years we would have these consistent platforms. We don’t even have a practice management system. There are 200 different types of EMRs out there. There are 500 different insurance companies in the United States. The variation and the degrees of variation are enormous. So I would say that in five years, anything could be improved.
From a technological perspective, we would have insurance companies and practice management software companies all being able to work off of the same platform so that these different pieces of these different applications can actually talk to one another and there’s a consistent way of being able to use it. Everyone knows Internet Explorer. You understand what you’re going to get. You know where the URL goes. You know how to get to a site. The same sort of thing. If there is that consistency across all the insurance companies, just being able to do the one repeatable exercise over and over and get the same consistent output, that would really go a long way to being able to remedy a lot of expense that’s in healthcare today.
Personally though, I would like to see things changing in a much more radical way. We talked a little bit about insurance companies actually being insurance companies again. Why have networks? Why is there a need for physician networks? There’s no benefit to that except the insurance companies are really figuring out who they are going to pay, what, and when, depending on your specialty, depending on the size of your practice, depending on the area of the country you are in. There’s an awful lot to manage for an insurance company and it adds a lot of expense. From their perspective, they are able to control the dollars a lot better.
Instead, get rid of the networks. Move more towards consistent platforms where consumers can have access via IT, via Web sites, to be able to see what are the fees that a doctor is going to be paid if you were in charge of your own healthcare spending; if those dollars are yours to spend.
For example, instead of an employer putting all this money into the insurance company, if it goes into HSA accounts and you get to spend that on your healthcare and you have an insurance plan that rides that. If you’re able to use technology to compare what insurance company is going to pay for, say, an office visit, a new patient visit to a dermatologist – you can see, using technology, what any dermatologist in your area is going to charge you for those services, then you can decide, “Am I go to the dermatologist that’s going to accept a $100 payment that my insurance company is going to pay, or I want to guy to the guy that came highly recommended but he’s going to charge $150 and I’ll pay $150 out of my pocket?”
To me, that’s where technology can really help us here. We do it with everything else. We go comparison shopping for everything from computers to even grocery items at this point. We can buy cars online. We’re able to compare all these things to see what the real costs that are involved in it, what people are charging, what you need to pay out to acquire certain products and services.
If there could be a better use of technology five years from now, I’d love to see something like that. Get the transparency in place with the insurance companies. Stop with the complexity of IT that’s being used to really keep costs high and keep physicians and consumers in the dark and really open it up so the health system can be more of a commodity than a luxury that it is for so many people today. It’s probably the most expensive service that they can possibly utilize.
Is there anything else you would like to mention?
As you can tell, I tend to have a somewhat diverse way of looking at the market. I think information technology is so important to so many things, but we’ve really cracked the code in terms of how that’s supposed to work. How it’s supposed to work with purchasing transactions over the Internet, those sorts of things.
Where we seem to not be applying ourselves very well is having consistency in our systems to costs in the healthcare industry. If we focused on that and, through it, forced a lot more transparency with the insurance companies, than I think we’ll really start seeing some tremendous changes in the healthcare industry. The costs don’t have to be what they are. They are what they are by nature of the complexity that we’ve built into the system. Information technology is a great leveler and a great simplifier of complexity in all other industries, so cracking the code in terms of healthcare and how to apply it to healthcare and make things a lot more transparent.
This is what we at The Verden Group are trying to do through our policy tracking and ability to actually get that information out to the different entities. Right now, we work with everyone from brokers to politicians to providers of care, to really highlight and show how the insurance companies are operating, what their policies are looking like. Start asking those questions, “Why?” as opposed to things that have happened after the fact and you take it on the chin and move on.
This is forcing much greater dialog at all levels of society. It’s not just between the insurance companies and the physicians. It’s not just between regulators, the insurance commissioners in different states trying to keep up with regulations. Now it’s putting all these things together and saying, insurance companies have invested a lot of time, money, and energy in making this as opaque as possible in order to reap as much profit as possible. So we can deploy IT for purposes of transparency and I think we’ll win the war on this one.