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The Hypocrisy of a Simpler Patient Bill
HIStalk gauges industry reaction to the HHS patient bill design challenge, which aims to highlight the need for easier-to-understand statements and more patient-centered engagement.
Medical bills, especially traditional paper statements, are not known for being easy reads. More often than not, they are a mixture of codes, abbreviations, dates, and — if a patient is lucky — breakdowns of services and supplies rendered.
The eyes of most patients stray immediately to the balance due, the derivation of which is typically shrouded in mystery. What makes perfect sense to a provider’s or payer’s accounting department causes sticker shock in patients, who feel helpless because they don’t understand what they’re being charged for. The bill inevitably sits unpaid for several weeks while patients wait for some sort of “deux ex machina” that never comes.
It is this frustrating fiscal conundrum that HHS is looking to address with its “A Bill You Can Understand” design and innovation challenge. Announced in early May, the challenge –which “seeks to draw attention to the complexity of medical billing and how patients are impacted” — has two components. One prize will be given to a participant that designs the easiest-to-understand bill. Another will be given for creating the best transformational, patient-centered approach to improving the medical billing system. Earning either prize will be no small feat.
Stop the Insanity
HIStalk readers have wasted no time in sharing their withering opinions of the challenge. Frank Poggio, founder and CEO of The Kelzon Group, got straight to the heart of the matter:
This is the height of hypocrisy. Does CMS think providers on their own created the insane billing requirements and processes? It started with Medicare Part A, then B, then D. Co-payments, deductibles, out of network, referral approvals, contractual allowances, UC charges, and on and on. Next, billing systems will have to deal with VBP, P4P, bundled payments, MACRs, and more. Providers never asked or suggested any of these — they just have to figure out how to carve up charges/costs and services and put it all on a one-page bill. A 1995 analysis found that the Federal Register contains 11,000 pages dealing with an IRS 1040 submission, but hospital billing required 55,000 pages to describe. If CMS really wants to simplify the patient bill, they need to go to a single-payer system. Until they do that (not likely), the patient bill will continue to be the mess it has been for the last 50 years. Who do I call to collect my $5k?
Poggio has a point, of course, but that doesn’t mean attempts shouldn’t be made to streamline the patient billing process, especially when recent studies have found that the most significant patient payment challenges include a patient’s inability to pay or pay on time and the need to educate them about their financial responsibility.
While the challenge hopes to address the education piece, it also opens a Pandora’s Box of questions related to price transparency and consumer empowerment. How can patients become savvy healthcare shoppers if the cost of services they ultimately select aren’t properly explained to them, not to mention agreed upon by all parties involved ahead of time?
A Step in the Right Direction
Ten healthcare organizations, including Cambia Health Solutions, have signed on to test and implement solutions submitted to the challenge. It’s an apt fit for Cambia given its history of focusing on improving transparency within its regional health plans and direct health companies, plus its emphasis on incubating transparency innovation within its collaborative Cambia Grove space.
“At Cambia, we are relentlessly focused on creating a healthcare system that removes confusion, mystery, and pain that it creates for consumers – a system built to engage with and flawlessly serve individuals and their families with respect at every turn and in every encounter,” says CHS President and CEO Mark Ganz. “Producing a medical bill that is simple, straightforward, transparent – and therefore truly accountable to patients – is a huge step in the right direction.”
HFMA Director Sandy Wolfskill echoes Ganz’s comments, adding that, “This new HHS challenge is focused on the medical bill for the patient, so receiving a standardized, understandable bill from all healthcare providers should help patients immediately understand what they owe and why they owe it. There is a very realistic chance that bills will be resolved more quickly.”
Wolfskill also believes that a truly understandable bill will ultimately help patients feel more in control of their care. “As patients, especially those with high-deductible health plans, begin to exercise their options to shop for more affordable, quality care,” she explains, “they will begin to expect that providers are transparent around price and quality, and can explain prices in a way that allows patients to compare providers.”
Ignorance Isn’t Bliss
When it comes to challenge detractors, Wolfskill advises HIStalk readers to remember that “HHS is challenging providers to produce an understandable bill for what the patient owes for the service – and assembling that information is totally in the hands of the providers. Yes, there are multiple stakeholders, but at the end of the day, the provider has all of the information needed, including the impact of the provider’s financial assistance policies, to communicate effectively with the patient about the financial responsibility involved.”
“Rather than ignore this challenge from HHS,” she adds, “providers should realize that this medical billing challenge is simply another step in the transparency journey. HFMA has publicized industry guidance and best practices around price transparency and patient financial communications, and sees this HHS initiative as another component in developing a high-quality, comprehensive financial care approach for patients to compliment the high-quality clinical care already being provided.”
Billing’s Bottom Line
While steps in the right direction and forward momentum on the transparency journey are positives for patients, the challenge and its results may be more of a marketing exercise than a truly game-changing attempt to create an industry standard.
“I think the challenge is a great exercise, but there are ultimately too many competing interests,” explains Patientco founder and CEO Bird Blitch, adding that there will be technological challenges for those providers who use different inpatient and outpatient billing systems. “I think everyone is passionate. People have to think objectively about the payment piece and not just about sending the bill. Payment is what we need to be thinking about, not billing. If we focus on that, then we’ll be answering the right question of how to bill better.”
Blitch brings up a good point. While many providers are beginning to think about patient bill design from a marketing and patient satisfaction perspective, the bottom line of patient billing is still payments received. Patient satisfaction scores could improve in tandem with bill design, but the success of any design standards adopted as a result of the challenge will ultimately be measured in lower provider billing costs related to more timely patient payments.
Better Bills Start with Consumer Friendliness
“If you’re building it to increase patient satisfaction, great,” Blitch says. “Then, you’ve got to understand patient dissatisfaction. I think the biggest thing I might look at from a billing perspective is that it’s written from the standpoint of an accountant. If you look at a lot of these bills, they’re columns, debits, and credits. Most consumers don’t have accounting majors, and so when we look at designing the bill, we look at how consumers are understanding and consuming Web content. We look at not only color psychology, but iconography, even the actual user experience. How do their eyes track? Eye motion up, down, and around the bill happens within split seconds of opening the letter, and that matters. I don’t think providers are looking at it that way yet. They’re still looking at it from the accountant’s viewpoint. The challenge’s stance is that you’ve got to tear your current design down and start over.”
“We all need to be thinking about this from the consumer’s standpoint, but I think we also need to ask, ‘Why are we doing this?’ This is not a bunch of snake oil,” he emphasizes. “We’ve all had terrible billing experiences. Change will happen when it is driven by consumers, or when it is driven from the bottom up. No one thought that the banking industry could be disrupted, but online bill pay did. No one thought that Walmart could be disrupted, but Amazon has done it. No one thought that Blockbuster could be disrupted, but Netflix did it. When you empower the consumer, when industry gets out of the way and lets them choose and gives them freedom to understand, they will respond accordingly.”
(Dis)Satisfaction will Lead to Savvy Shopping
As Blitch mentioned, healthcare’s many stakeholders are passionate about this topic. Whether it’s patient satisfaction or payments received (and it’s becoming increasingly difficult to separate the two), the medical bill of the future will be a key component of a patient’s healthcare journey – perhaps even the deciding factor when the question of follow-up care arises.
The HHS design challenge has at the very least placed a spotlight on the need for more patient-friendly billing, and that’s no small thing given that 47 percent of consumers are paying more attention to their healthcare bills than they did a year ago. That figure will likely increase as premiums and deductibles continue to soar, hopefully making savvier healthcare shoppers of us all.
While I agree with much of the cynicism in Mr. Poggio’s quote, I have to wholeheartedly disagree with the prescription to turn to a single-payer health system. He is inviting the wolf all the way into the door who created the mess in the first place and proposing making them even more all-powerful and monopolized. Does he really believe that they will somehow suddenly find sagacious angels to run the system at that point? The real answer is market-based and comprehensive demand and supply-side reforms of the kind that Economist John Cochrane has written about extensively and which I capture in a blog post at https://gymnasiumsite.wordpress.com/2015/11/13/economic-growth-is-this-elections-most-important-issue-enter-a-comprehensive-growth-manifesto-by-renowned-economist-john-cochrane/
Over July 4th weekend, while attending parades and bbq’s take your own small survey. Ask friends and family; What do you think about your billing experience with the local hospital? Most of the time I hear, “It sucks.” Yes, billing is a problem and with patients paying a lot more out of pocket, it needs to be fixed. Hospitals trying to shove a program built around collecting from insurance companies, into a program for collecting from patients will never work. Start with a clean slate, where the Patient is a “customer” and an individual. A bill with new fancy colors won’t solve the problem.
There are lots of ideas about how to better present the information in any single bill. But the real challenge is that a patient wants to understand the financial landscape of the entire episode of care — what do i owe the hospital? the surgeon? the independent lab? Until we can get to consolidated billing we will improve the parts without having solved the problem.
I am not necessarily in favor of a single payor system. What I am saying is billing is driven by rules and right now there are way too many organizations (including the feds) that make and frequently change the rules. One set of rules would generate a much simpler bill.
As a former CFO I know that part of the problem is not necessarily the bill presentation but the content /description that causes the patient to ask: What did Medicare (or insur co) pay for and why? Or why is my balance $1,022.77 ? When they ask those questions they (we) have to open Pandora’s box.