Kevin Fleming is CEO of Loyale Healthcare of Lafayette, CA.
Tell me about yourself and the company.
I’ve been in financial services in the healthcare industry for about 30 years. I had a long career at Ernst & Young. I ran a nationwide M&A practice and did well there. I then transitioned to Electronic Data Systems, where I was an executive. I ran a large strategic business unit with healthcare and financial services companies, some of the largest in the nation. It was heavy lifting — IT outsourcing, business process operations, claims processing. Roll up the sleeves, serious heavy lifting type of operational and IT activities.
Then I got a greater good calling. I took over as CFO — and then as the turnaround CEO — of the first full risk-bearing accountable care organization in the United States called Paradigm Outcomes, based in California but with a nationwide footprint. A lot of Paradigm’s business model was baked into what we now know as accountable care organization standards and programs.
I tried multiple times to retire but failed miserably at each of those. I found that my calling in life was to work. I took on another greater good calling, which was to help patients and providers deal with what perhaps is the most complex, perplexing, and most important issue — or at least it should be on their plate — and that is the phenomenon of consumerism in healthcare. That’s why I joined EPay Healthcare, and we’ve since rebranded to be Loyale.
As the tagline suggests, Loyale thinks patient responsibility shouldn’t be a burden. It’s an opportunity to create lasting loyalty and Net Promoters out of patients. In fact, the very survival of a lot of what we call the healthcare delivery network today depends on being able to do that.
How much patient dissatisfaction is caused by the financial aspects of their encounter?
I think if there were an accurate capturing mechanism for that, it would probably be well north of 80 percent. The patient’s first experience entering a healthcare setting is often administrative and that immediately becomes financial — looking for a co-pay. Their last experience is making that final payment or some other outcome, such as not paying a collection agency.
We see a lot of companies avoiding even capturing the satisfaction with the financial dimension of the relationship. We think that’s not only fundamentally wrong, but dangerous. To some degree, it’s low-hanging fruit, something that could change in a hurry with a little bit of effort. It could change dramatically for the better with a real patient financial engagement solution. That’s what we’re all about.
Consumers are fine with other industries in which companies require payment upfront and that market selectively to those who can afford their product or service. How can a physician practice have a different kind of relationship with people they know are able and likely to pay versus those who are not?
That hits one of the critical success factors to patient financial engagement. It’s a critical part of patient satisfaction overall.
The number one issue now — even exceeding anxiety over the clinical procedure to be performed — is financial anxiety. The inability to deal with the responsibility that everybody knows is coming, especially with the proliferation of high-deductible plans. The patient knows it’s coming. They don’t know the exact amount, but they know it’s going to be negative.
Using segmentation upfront to understand where a patient is with regards to both ability to pay and propensity to pay is a wise thing to do. It’s wiser yet to use it to dictate how you to interact with the patient financially.
That should never mean, in any way, compromising the quality of clinical care delivered. In fact, it’s consistent with the Hippocratic Oath — do no harm. The harm that the patient is afraid of is not just clinical, it’s financial. If you’re identifying those patients who are going to have a hard time paying and giving them options up front — showing a plan, showing a solution to eliminate that anxiety — you’re helping them, and of course, helping yourself.
Studies have shown that patients, younger ones in particular, are willing to pay if given a convenient way to do so. Does technology play a greater role in financial transparency and ultimately collections?
Yes, very much so. There are five or six golden opportunities for healthcare in having a patient financial engagement business strategy and follow-through capability. That’s one that’s near the top of the list — having a powerful digital channel, a portal, a go-to place.
You probably saw some of the same studies that I did that suggest in the next five years or so, Millennials will be making 70 percent of all healthcare decisions in the United States. I don’t know if that’s true or not, but we do know that the percentage is increasing constantly. Sixty to 80 percent of Millennials want to do all their business online, including clinical interactions, including making payments.
That does a lot of good things for everybody. You’re servicing them in the channel where they want to do business. You’re servicing them better at a higher standard that can cover all things clinical and financial in one setting. Working with us, they’re exposed to financing tools and vehicles, a variety of them that they probably wouldn’t see elsewhere. They’re able to work out their own plan, their own financial solution if you will, to deal with their responsibilities.
I don’t think that’s unique to Millennials. Obviously as a demographic, especially as they move more and more into prominence by numbers, they’re focused more on healthcare decisions. We’ve found high pickup rates for almost all demographics, including those at the upper end of the Baby Boomer age range. It’s not unique. People want to be able to do business in a convenient setting and a digital portal is very much one of those options.
It also reduces dramatically the provider’s cost to collect. As you can imagine, once the automation is in place, the cost of service is pennies on the dollar compared to rendering physical statements. Maybe a lot of those statements, because you extend out to multiple collection cycles because the patient isn’t paying. To pay for a call center, to pay for facility staff who many times would just as soon not to be involved with this at all.
They went to medical school, but now with the bleed-over effect, as we call it, instead of delivering medicine, they’re answering patients questions about, “Why is my estimate so high?” All that can be done extremely well in a digital portal. That needs to be a primary part of any provider’s financial engagement strategy, in our opinion.
Hospitals that don’t often have a strong reputation for being friendly or efficient with their billing and collection practices are increasingly acquiring, sometimes invisibly, practices and urgent care centers. Are you seeing patient engagement and loyalty changing as a result?
I had a front-row seat to consolidation in the financial services industry. We’re seeing a slightly different version of the same movie and the same end effect — a lot fewer entities. The banking industry consolidated almost by 50 percent in terms of the number of banks. A few large networks and regional networks were established. Specialty players came in, like PayPal, and picked up some very lucrative areas.
The same thing is happening in healthcare right now. Hospitals and healthcare networks are looking at that same near-extinction event as the financial crisis of 2008-9. They are over-leveraged and their operating cash flows are impaired for a lot of reasons. One at the top of the list is patient responsibility and the inability to collect. There are a lot of reasons that consolidation will pick up steam.
That’s one reason we were selected by the nation’s largest healthcare network, HCA, to be their platform and solution standards. The idea of episode of care. You can deal with a patient if they have a primary care physician or urgent care physician that they see ad hoc who then refers them to the hospital or outpatient setting, surgery centers, and so on. It doesn’t really matter. Our system will pick up all those physicians, all those caregivers, and amalgamate them into one financial episode of care.
The patient can see all of that at once. Instead of receiving five different bills and maybe one financing option or even maybe none, they’ll see a holistic solution for all the episodes of care coming from that healthcare network. In terms of consolidation, that’s an important thing to be able to do.
Part of this is you always want to service the patient better. But in terms of share of wallet, you want to be giving care in all those different modalities and stages and presenting an easy to understand financial bill instead of alternatives in aggregate for all of them. That’s a tremendous advantage.
Are providers recognizing that, as in other businesses, patients who are willing and able to pay cash up front would probably be more inclined to do so if they’re offered a discount?
The more forward-thinking ones are. We have a tool within our platform called Affordability Workbench. One of the doors, if you will, is our prompt pay discounts. Those would be highly apropos for self-insured patients who are not otherwise getting negotiated discount rates. The full charge master price without any discounts just isn’t going to work for them. There’s no way they can shoulder it.
I can’t say that’s universally applied, but we’ve specifically provided for it in the toolset for that very reason, to give the patient options that they don’t always see. Hopefully one of them works.
We also have a comprehensive array of payment plans that are extremely flexible. The patient is able to self-construct their own payment plan according to their cash flows within certain parameters that the facility controls. We have connections with all of the major third-party lenders, secured and unsecured facilities, and a pretty good idea of where they play well and where they won’t play well based on a provider’s requirement and patient financing needs.
Do you have any final thoughts?
The critical thing here is to get in the game and to play the game to win. If this plays out like the financial services industry consolidation, as many as half the healthcare providers in the country just won’t be there, probably within the next 10 years. You have behemoths like Walmart, Walgreens, Amazon, and CVS aligning with the mega payers. They are going to cherry pick some of the very best business in primary care, urgent care, and pharma. They are absolute experts and masters at consumerism given their retail origin.
It’s vital to play this game to win. Status quo is not winning. Just getting started is the biggest part of the battle. We have phased implementation with customers, so they can do it in pieces that they can absorb. Within 18 to 24 months, they’re all the way there.
The biggest message I would leave is to get in this game. This is the biggest issue on the table, the biggest elephant in the room. I know you’ve got a lot of other fires burning around you — value-based care, EHRs, filling capacity, and so on — but no patient, no mission. No money, no mission. Those are literally the table stakes here. Get in the game and get in the game to win.