Whatever mess is going on with VA aside, DoD has demonstrated that Cerner can be deployed successfully at large scale.…
Patrice Wolfe, MBA is CEO of AGS Health of Washington, DC.
Tell me about yourself and the company.
I am a industry veteran. I’ve been in the healthcare space, particularly the healthcare technology space, for over 35 years, and have worked both on the provider and the payer side. I think I’ve seen every possible permutation of the challenges that we face in this industry in one form or another. I’ve been with AGS for almost four years. I’m so grateful to be in the revenue cycle space because we are at the core of the challenges that health systems are facing.
AGS is a global provider of revenue cycle products and services, mostly to large health systems, but also we work with a lot of big physician practices and other players in the market.
What is the financial situation of health systems?
It is dire for a lot of health systems. A few dynamics have converged simultaneously. The rise in inflation impacts the cost of goods that hospitals and providers use and the wages they pay. Inflation is impacting margins across the board. Then you add to that the dynamics around clinical staffing and administrative staffing, where we’ve seen huge turnover across the health system space. They are left with fewer people to do the jobs that need to be done. Then when they try to fill these positions, particularly the clinical ones, they can’t find people, so they are using temp staff at triple the cost. You have huge cost pressures from that.
On top of that, there’s the drop in investment income that some health systems have seen based on the markets.
The news came out last week that the federal government will be rescinding a lot of the additional Medicaid coverage and other types of protections that were put in place during COVID, so a lot of health systems will be left with even more indigent care.
The financial pressures are coming from every single angle for providers. We hear it from our customers. We see the anxiety that they have around, how am I going to cut costs? How am I going to increase revenue given all of these headwinds that I’m facing?
How will technology such as robotic process automation, natural language processing, and generative AI contribute to revenue cycle management?
Some of them are a little more near term than others. RPA has probably been around the longest. There are a lot of good use cases for using automation. I see across our customer base plenty of use cases where they’ve brought in automation to do some rote manual activities. We do quite a bit of RPA to drive out some of the low-value tasks that you don’t need a human to do, so that the humans can focus on the more complex work. The low-hanging fruit has already been plucked in many cases, but there is an endless supply of additional use cases. It’s dependent on the health system’s ability to harness the data from their EHR and other types of systems and have the ability to attach the RPA to whatever the process is that they are focusing on. It’s a lot harder in practice than it sounds when you are planning it out.
There are some fantastic use cases in the HIM or coding area with the greater sophistication that is available in machine learning and natural language processing. You can see 10, 20, even 30% improvement in coding efficiency. With that comes increased revenue, because if you are getting your coding correct, that can then drive more accurate representation of things like case mix index, which then drive higher revenue.
These types of tools are still in earlier stages of maturity. But with what we are doing in computer-assisted coding, we have some clear examples where customers are generating additional revenue from implementing these types of tools.
A lot of it comes back to data. You have to be able to extract from your EHR all the right information to take advantage of these tools. That is a critical success factor.
We have been playing around with not just ChatGPT, but some of the other OpenAI tools. We’ve implemented a couple of use cases for our internal use. Voice to text is important in the work that we do because we are often calling payers on behalf of our customers. Sometimes we’re on hold for 40 minutes or an hour, and the conversations that are taking place to follow up on claims can be lengthy and complicated. We’ve been able to use some of the OpenAI tools to turn those lengthy voice discussions into text so that we can do better quality assurance on our own folks as they are in these calls. We’ve implemented a few other use cases. There’s a lot of promise here, but I roll my eyes a little bit at some of the statements that are being made about how it’s going to revolutionize healthcare in the near term. I think it’s more of a long-term play.
Assuming that all the important chart information is in digital form, wouldn’t generative AI be ideal for coding and abstracting, perhaps replacing humans in the same way that speech recognition has done?
Given how long I’ve been in this industry, I have a hard time saying that I think things will be completely eliminated. I can’t believe that we are still using humans to post payments, which should have gone away 15 years ago.
The promise is there that these tools will be able to take over a good chunk of that work. But we have seen too often that a human is required to do some of the more nuanced review. It may be that AI can eventually code a chart, but the human is most likely going to need to continue to do some of that auditing. There’s a lot of hype around things like autonomous coding in certain discrete specialties like radiology, where the clinical nomenclature is limited. But at this point, only a subset of those charts are able to make it through the autonomous process. You have to have humans on the back end to take what falls out and to do that auditing. We have the promise to be able to automate far more of this work than we have to date, but as a grizzled industry veteran, I don’t think we will get to that 100% automation level.
Everybody is unhappy with the prior authorization process. Can it be automated or eliminated?
That is probably the single most expensive activity that takes place in the revenue cycle. I’ve seen estimates of $80 for each prior authorization if you add the cost of the payer and provider to adjudicate. That’s a huge pain point, and there will be a lot going on in the industry to address this. My understanding is that Epic has been working on this for a couple of years now and has some payer partners that they are doing some development work with. The EHR is part of the solution, but I don’t think it is going to be able to completely solve that problem.
Without a doubt, some of these front-end activities are getting more complex. We hear from our customers that the barrier to prior authorization has only gotten worse since the pandemic. Some of that may be a reflection of staffing and other problems on the payer side. They are having the same kinds of issues providers are with the great resignation and other types of administrative challenges. We are seeing the prior auth space get worse, so any kind of automation that can be done in this area is of enormous importance to providers and to payers.
It’s a huge pain point to physicians. We are doing patient access work, including prior auth, with one of our customers. Their physicians are unhappy when they get involved in these peer-to-peer conversations with payers, or when they have to re-review the documentation that was submitted. We are doing a lot to try to minimize how much the physician actually has to get involved in these types of interactions, because it takes them away from their core mission, which is to care for patients.
It’s probably not the best example of healthcare consumerism, but how is patient payment processing developing?
This is an area where every single person has a personal opinion. Earlier in my career, when I was running a patient payments business, any time I talked to anyone, they had a story about trying to pay for something or trying to understand what they were supposed to pay for. This is a visceral topic for a lot of people.
There has been a lot of progress made, particularly around the patient front door type of growth. I see progress in patient registration and all the things that we try to push to the front of the revenue cycle that can and should get done before the patient shows up. Some of the mobile-based and text-based tools that are out there are pretty good. As always, getting them correctly integrated with the EHR is often a problem for these providers.
So many people are comfortable with mobile-based payment activity that it makes me happy when I go to a doctor’s office personally and have to do a mobile-based registration process. There has been good progress made in this area, and while I don’t think we are done yet, we want to meet people where they want to be, and most people want to do mobile-based banking and other kinds of financial activity. I feel fairly hopeful about that.
How have operational and market conditions influenced the appetite for innovation in health systems?
That’s such an important question. In the course of my conversations with our customers, I see two camps. One is that I see the organizations that are using this as an opportunity to double down on innovation, but I would say innovation with clear ROI expectations. What we are trying to do a better job of at AGS is quantifying the revenue impact we are having for our customers. Our space historically has patted itself on the back in terms of its ability to reduce customer expenses, which is a great thing, but that’s not enough right now. In this environment, it’s about how you will positively impact a health system’s revenue. Organizations that are a little more risk-taking and forward thinking are willing to double down on innovation, but they want to see those metrics, which is completely reasonable.
On the other end of the spectrum, we are seeing health systems that are sitting around the boardroom, with the CEO and CFO saying, “I need $5 million in expense reduction out of you, I need $10 million out of you, and $2 million out of you. I don’t care how you do it, just go out and do it.” In those organizations, we are seeing more things that are retrenchment, such as cutting IT spend or vendor use. That’s a challenging situation, because they will regret some of those cuts two years from now. I completely understand the pressure they are under, but there are wise ways to make those cuts and maybe not so wise ways to make those cuts. It’s a challenging position for a lot of these health system executives.
What is the company’s strategy over the next few years?
A few things really matter to us. Our mission is to drive great financial health of our customer organizations. A few things are top of mind. There is a continued need to bring technology to bear in what has often been an inefficient and human-intensive process. As technology matures, whether that is AI or other types of technology, we want to be there thoughtfully using it on behalf of our customers.
The other thing is that we we are fairly acute care focused. We work with a lot of large specialty physician practices, but mostly large health systems. Many of these health systems don’t just do hospital-based care for their patients. They offer ancillary service lines such as home care, skilled nursing, ambulatory surgery centers, et cetera. We have to continue to think about and define the revenue cycle more holistically on behalf of these organizations, because there are opportunities for them to gain efficiencies and drive more revenue out of some of these other parts of their organizations. Those other parts might use different EHRs. They might be managed completely outside of the standard revenue cycle. There could be some good efficiency gains in some of these other areas over the next few years, particularly as we continue to see consolidation in the market.