Modernize medical payment systems

  • Article by: BRIAN K. BEUTNER
  • Updated: May 2, 2012 - 8:46 PM
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Counterpoint

Two recent commentaries on the Fairview/Accretive Health issue have framed one of the growing problems in health care today. Unfortunately, the framing has been done in the all-or-nothing lexicon that has become all too common in public discourse.

This is not about "many hospital CEOs in the Twin Cities [being] paid more than $1 million" ("Health care providers have lost their way," May 1). Nor is it about paying in advance for services like your taxes or the neighborhood hardware store ("Pay up front? Be still my beating heart," April 28).

This is about how we pay for health care.

It is a fact that patients are being required to bear an increasing amount of their health care costs. It became government policy long before the Patient Protection and Affordable Care Act was passed.

Having patients pay a share of their care was fundamental to the Medicare Modernization Act of 2003. (Remember the "donut hole" in prescription drug coverage?)

According to the Kaiser Foundation's most recent annual review of health benefit plans, nearly 75 percent of covered workers have a general annual deductible that must be met before insurance pays for any services.

In fact, nearly one-third of covered workers are now in high-deductible health plans. All of this is in addition to average annual premiums that are $15,073 for family coverage, of which the worker pays, on average, $4,129.

Patients do have an obligation to pay. We cannot wish that away. But we can be smarter about it.

Both commentary writers are correct -- health care is different from other consumer services. It is dramatically more complex in its delivery and in how we finance it.

In its seminal research report on the U.S. health care payment system, McKinsey & Co. pointed out that expenditures on processing bills, claims, payments, bad debt and other transactions totaled more than $300 billion a year.

The report went on to show that these inefficiencies are concentrated in the payments that patients owe to physicians, hospitals and other health care providers.

The cost and complexity of consumer billings and collections are onerous, and according to the report, "physicians and hospitals typically collect only 50% of this balance." This adds up to more than $60 billion annually of bad debt.

This is something that we all pay -- in higher premiums for those of us fortunate to have insurance coverage and higher prices for those who do not.

The answer to improving the payment system in health care is not "everyday shakedowns for payment in advance" or "high-pressure boiler-room-style" tactics. McKinsey called for innovation, and I agree. The key is technology.

Technology in health care delivery is exciting and a source of pride for many Twin Cities-based companies. It is time to use technology on the administrative side of health care.

That is why we have pioneered ways for health care providers like Fairview to secure payment from patients without requiring it in advance. My company, mPay Gateway, enables health care providers to simplify the patient payment transaction so that they do not have to outsource it to mercenaries.

Patients should not be viewed as deadbeats; they know they have payments obligations. Rather than bullying them, let's make it easier for them to pay. Provide answers and alternatives, not ultimatums.

Ours is not the only way that health care providers can improve transparency and simplify the payment process while still delivering bottom-line benefits. But we cannot continue to apply old techniques to modern problems.

I encourage Fairview and other health care providers to start being as innovative in their administration as they are in the care they deliver.

Using modern technology to improve the patient experience by providing transparency at the point of service and to eliminate multiple, confusing billing statements will go a long way to helping providers remain focused on giving care.

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Brian Beutner is CEO of mPay Gateway of Minneapolis.

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