Healthcare costs in the US are massive — costs are growing faster than GDP. By 2024, US health spending is expected to hit $5 trillion. And in 2018, total expenditure in the healthcare payment market was $3.6 trillion (Business Insider report, here).
Of course, these massive costs are not ‘new’ news. It’s merely today’s status quo. We have accepted that healthcare administration is a vast, tangled, tightly-knit, and expensive web of red tape. We shrug our shoulders at the technical limitations, complex processes, regulation, corporate mindset, and waste that abound in healthcare admin. Meanwhile, countries like China, who are more nimble and focused on AI, are set overtake the US healthcare industry.
The healthcare payments market is in desperate need of approaches and innovations that reduce manual intensive processes — and save money. Even now, in 2019, many payments processes in many hospitals are manual. Manual typically means cumbersome, prone to error, complicated and expensive.
Over the last week, we have been reminded about the manual work in both claims and patient payments. And, our team has been surprised to uncover areas we had not previously considered that are maintained by burdensome manual processes.
To share a little of what we’ve learned in the past week, here are three of our manual-intensive discoveries:
1) Overpayments From Insurance Companies
For various reasons, insurance payers often overpay on claims. Overpayment creates an admin headache for providers. It adds noise to AR, and requires a manual process of identifying, flagging, matching and submitting refunds for overpayments. Even if hospitals use automation and AI systems for claims, the process for overpayments is almost completely manual. Large providers easily have 30+ people who touch overpayments. Automating this refund processes offers new cost savings and helps streamline account receivable.
2) Reporting
Reporting should be automatic and straightforward. “Pull a report,” sounds easy enough, click a button and get a look at your KPIs. That’s not the case in healthcare payments. For most health systems and RCMs, reports are not instant. We’ve talked with providers and billing companies that spend a full week, each month, pulling standard reports. Reports are difficult to customize, require a lead time to prepare, and take valuable hours from a BI employee. This is expensive, limits oversight, and makes it harder to optimize operations. Being able to instantly and intuitively drill into payments data and access reports is a powerful improvement for many hospitals and RCMs.
3) Implementing Improvements
A slew of companies exist to uncover problems and identify opportunities in healthcare payments (including Sift). Everything from pinpointing coding errors to predicting a patient’s propensity to pay. This information is helpful for hospitals and RCMs, but it doesn’t necessarily enable them to make improvements. It’s one thing to uncover impactful data, but it’s another to implement in a way that drives improvements. With propensity to pay, for example, few companies go beyond patient scoring. Hospitals and RCMs are on their own to decide what to do with scores. They may have no way to tie propensity to pay scores into their patient revenue cycle. To limit manual processes, improvements need to be integrated into revenue cycle workflows.
These examples are the tip of the iceberg. There are a variety of places in healthcare payments where manual processes can minimized or replaced -- improvements that offer cost savings that America’s healthcare system needs, in so many ways.
