Healthcare remains among the most paper-based industries in America, which means stakeholders from patients to providers to payers are missing out on digital efficiencies.
Probing the intractable use of paper and steps required to change it, PYMNTS’ Karen Webster was joined by Bank of America (BoA) Managing Director, Co-Head Global Commercial Banking Sue Caras; Kaiser Permanente Vice President and Assistant Treasurer, Cash Management Sheila Stephens; and Cigna Treasury Managing Director and Assistant Treasurer Scott Lambert.
Webster asked the healthcare panelists to rate their digital transformation from 1 to 10, with 10 being an end-to-end digital billing and payments experience. Each rated their organization as a 6, while BoA’s Caras rated the industry at closer to a 5.
“It’s one of the most complex ecosystems for payments that exists,” she said. “When you think through the multiple parties, whether it’s billing, insurance claims, consumer payments, transaction processing, all of that is about the payment.”
Stephens said Kaiser Permanente is aware of the digital divide and is addressing it, as did Lambert, both pointing to progress made not just due to the COVID acceleration, but before that to the Affordable Care Act (ACA) in 2014 ushering in ACH payments and ERA reassociation numbers for payment addenda records to help in reconciliation and cash application.
Lambert said FinTechs are a major change agent in this, acting as “intermediaries between payers and providers for different things like coordinating preferred payment types, aggregating data from payers, and simplifying the whole cash application process. I rated the 6 primarily because I think we’re heading in the right direction.”
All agreed that industrywide standards are insufficient or just not there, which is a huge hurdle to overcome and may require government intervention. Under its own steam, Cigna has converted about 75% of its providers to electronic payments, Lambert said, but added that less frequent users “just don’t think it’s worth it” to take that step with paper still predominant.
Stephens added that, “Even though there is paper, we are doing some robust analytics to help us manage cash forecasting,” in addition to expanding online portals tied to Kaiser’s enterprise resource planning (ERP) system, and ongoing outreach to unique business groups.
BoA’s Caras put much of the problem down to challenging legacy processes that, though costly and clunky, are what providers, patients and payers are accustomed to using.
Envisioning a digital “nirvana” from the perspective of a bank that processes oceans of healthcare payments, she described a “modernized healthcare business model that’s sophisticated and integrated” with end-to-end mobile scheduling and notifications, upfront cost estimates, prepaid co-pays, and post-visit results, all delivered digitally.
Incidentally, she doesn’t see FinTech integrations with complex provider or payer ERP systems as the most frictionless or cost-effective way to go. Many banks feel this way.
Cigna is having a good run working with FinTechs, however.
“Adding to what Susan said in trying to get to nirvana, one of the things that we did develop working with financial institutions and FinTech vendors is within the patient portal,” Lambert said, “where they can see all the claims that were paid, they could see their patient liability, and they do have the ability to click a button and pay their liability right then and there.”
Even so, senior leadership often needs convincing that paper should be cut in favor of digital, which comes with its own challenges, and Cigna is convening stakeholders to explore that.
For Kaiser Permanente and its quest for digital payments nirvana, Stephens said the massive provider pivoted to telehealth during the pandemic for care delivery and that was successful. Where it’s falling short is doing the same swing to payments.
“From a clinical perspective, it’s, ‘Yeah, I want to see my doctor on video.’ Then when you get to the payment, and it’s, ‘Well, I’m not so sure that I am secure with your security and the ease and simplicity of paying online because now I’ve got a bill that I may or may not understand.’”
She added: “How do we strategically look at getting those members who are not necessarily comfortable with technology, not necessarily comfortable with our security, and get them on board, and what does that roadmap look like?”
Given the multigenerational aspects of the healthcare journey from scheduling to treatment to payment, there’s a lot of work in educating older cohorts who are major healthcare consumers.
Caras joked that, “My parents are not going to use their mobile phone to book their doctor’s appointment, nor are they going to pay with their mobile wallet. What we’re trying to do is educate everyone in communities and across all generations that we can interact with them where they are on their digital journey.”
Cigna is approaching this with its portal strategy and FinTech partnerships, as Lambert said the insurance giant has “made a significant effort over the past number of years to try to simplify as much as possible so that they could specifically see the claim, they could see how much Cigna paid and what their liability is so that they can make their member payment.”
Stephens added to that, saying that starting with the ACA push in 2014, Kaiser embraced more of a platform model with its portal and mobile apps, noting that this type of connectivity is “the next big leap, but I don’t see anybody having that conversation.”
That led back to talk of standardization. Webster pressed on how that gets accomplished, and BoA’s Caras replied, “It’s the large players that are on the call with me today. It’s Cigna, it’s Kaiser, it’s the big players, but it’s the government, it’s all the small players. You need everybody collectively in the entire ecosystem to be moving in a standardized format.”
Here again, the panel said this may need a government mandate, along with incentives like discounts to get more stakeholders to use digital alternatives and rip paper’s hold on invoicing, messaging and payments across the healthcare spectrum.
Lambert wondered how a mass migration to things like Zelle and Venmo could be ignited in healthcare, saying legacy systems in place now weren’t built for such tools.
Stephens agreed, saying, “A big piece that Susan talked about is the outreach and the education, because if you start doing your analytics, you’ll be able to home in on these folks that continue to send us checks every month. Why do they do that, and how can we do something to help assist them in changing their behaviors?”
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