Mnet Health News delivers the latest news and information articles for the world of healthcare.

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David Brooks

David Brooks

Apple & Amazon Quietly Begin Move into Healthcare Sector

Until recently, Amazon’s new lab at its headquarters in Seattle was a secret.  It was set up to identify business prospects within the field of healthcare; prospects such as telemedicine and EHR’s.  But Amazon is not the only company seeking to make moves into healthcare.  Rumors that Apple is in talks with healthcare organizations and hospitals to unify health records onto their iPhone have recently been confirmed.

Reportedly, Apple has been in talks with Crossover Health, a company based in Aliso Viejo, California (also home to Mnet Health).  Crossover is a startup that works with employers who are self-insured to provide them with medical services at clinics that are onsite.  This move has stoked the fires of speculation concerning Apple’s move into the healthcare arena.

While negotiations apparently continued for several months, they did not result in a deal ultimately according to one unnamed source.  Others have mentioned attempts to strike a deal with One Medical, a concierge primary care organization based in San Francisco.  Tim Cook, Apple CEO, has publicly expressed an interest in business opportunities represented within healthcare.  An interview in Fortune magazine in September quoted Mr. Cook as saying “There’s much more in the health area.  There’s a lot of stuff I can’t tell you about that [Apple] is working on…I do think it’s a big area for Apple’s future.”

Apple has hired several healthcare experts and consultants in the last few years.  The giant tech company has also collaborated with researchers from Stanford to improve its digital health software while also make the iPhone the right place to go for patient health information.  Two software tools have recently been released by Apple; the Apple HealthKit and ResearchKit, which were designed to share patient health information with developers and also to recruit patients for clinical studies.

Meanwhile, Amazon is currently developing an EHR platform, telemedicine options, and health apps for devices such as the Amazon Echo.  Amazon is said to call its covert team “1492,” which, of course, is the year that Christopher Columbus first sailed to the Americas.  Another interesting tidbit is that positions for this team can be searched using the keyword “a1.492.”  They are also working on healthcare apps for devices such as the Echo and the Dash Wand.

In other apparently related news, President Trump recently announces that the CEO of Apple, Tim Cook, has promised that his company will build three large new manufacturing plants in the United States.

Patients Really Do Want to Discuss Price & Payment Options Prior to Surgery

Recent surveys show that more than ¾ of patients believe that it is either important, or very important to know what their costs are going to be before a procedure or surgery.  More than half of those polled also said they would like to discuss options for financing prior to receiving treatment.  However, a majority of providers are not making these options available to patients according to the results of a patient survey conducted by ORC International and HealthFirst Financial.

This survey showed that only 18 percent of those surveyed said that their provider had spoken to them at any point in time over the previous two-year period of time.  57 percent of respondents said they thought it important, or very important for providers to offer payment programs for patients; offering payment plans without any interest being charged.  Only 8 percent of those surveyed had ever been offered a low or no interest finance option by their provider.

Of the millennials aged 18 to 36 years old, 40 percent said that they would be likely or very likely to switch to a different provider if they were able to offer them low or no interest finance options to resolve their medical bills.  A full 29 percent of respondents to the survey also said that they would move to another provider if the new provider was willing to offer them the option of an affordable payment plan.

No matter what the income level of those responding to the survey; everyone worries about the cost of healthcare.  42 percent are either concerned or very concerned about whether they can pay for the self-pay portion of their medical bills in the next two years.  For respondents making less than $35,000 per year, that same number jumps to 54 percent but falls to 24 percent for those making $100,000 or more per year.  

Patients would like to know what they will have to pay as early on in the process as possible. 77 percent of those surveyed said it was either important, or very important that providers make it clear what the cost of a procedure or surgery would be prior to the date of surgery.  63 percent stated that they found it important or very important that pricing lists are published detailing costs for common procedures.

People now find that they have less room in their budget to take on the self-pay portion of their medical bills.  53 percent of those polled said they were concerned about their ability to pay $1000 in medical bills; while 35 percent worried about paying $500 in medical bills and 16 percent worried about paying $250 or less. 

The reasons the survey was commissioned was to understand how consumers are dealing with medical expenses now and in the future.  The survey makes it clear that when providers don’t educate their patients about options for finance, patients are willing to switch providers altogether or delay necessary care while they search for necessary help.  Neither scenario is good for the financial health and welfare of a provider though; so it’s extremely important for providers to develop a plan to meet the needs of patients even as they continue to evolve.

 

Healthcare Providers Fall Within Grasp of the CFPB

Doctor Works On Laptop

Healthcare providers and their vendors may not fully realize that they must answer to the Consumer Financial Protection Bureau (CFPB).  Providers, specifically, are not yet caught in the crosshairs of the bureau, but those providers that do report delinquent accounts to credit reporting agencies, make use of collection agencies (both first and third party), or collect on patient accounts can fall under the auspices of the CFPB.

Patients have the ability to complain to the CFPB about the way providers, central billing offices, or first and third-party vendors engaging in collection activities on behalf of providers carry out their collection activities.  When a complaint is sent to the CFPB, the group that the complaint was lodged against is required to provide a timely response to the CFPB.  Clearly then, the healthcare industry finds itself within the grasp of the CFPB.

The healthcare community is likely to face such scenarios more frequently due to the rise in self-pay brought on by the uninsured and those with high-deductible health insurance plans.  The changes seen in the healthcare field in recent years have created an atmosphere that encourages healthcare providers to rely on vendors to care for receivables while finding ways to improve the revenue cycle.  As these issues continue to evolve, it will become even more important to understand the risks associated with compliance that arise from time to time.

Clearly things have changed; it used to be that compliance was managed through a vendor contract, making the vendor responsible for any risks that might arise pertaining to compliance.  In those days, it was up to each vendor as to whether they actually followed along with federal and state regulations, which technically kept providers out of the loop.  But this is no longer the case.

In our time, the CFPB conducts examinations that take into consideration the entire chain of custody; which doesn’t allow for the blame to be maneuvered back and forth along the chain of custody.  This climate makes it imperative for providers and vendors to work together in the best interests of everyone involved.

The CFPB now requires that those taking part in the collection of payments from patients will ensure that their vendor partners comply with federal consumer financial law.  Of course, this can be a difficult task to tend to since medical providers are typically focused on providing care for patients.  It is clear, though, that the CFPB that there is a substantial risk when debt stemming from medical expenses is being collected or credit reported.

There shouldn’t be any doubt that the healthcare community is now well within the grasp of the CFPB; and the reasons appear to be for the benefit of patients.  Medical debt can prove to be quite daunting for many patients and the insurance industry trend of shifting medical costs back onto patients is seen by many as a crisis.  Compliance with state and federal laws should be a top priority for your vendor partners and they should be working diligently to ensure that the best interests of your practice are always being met.  Are you getting this level of service from your vendors?

Patient Credit Scores Get Grace Period Following Healthcare Services.

For many, an unexpected healthcare crisis can quickly lead to a financial crisis.  Surveys show that slightly more than half of all debt showing up on American’s credit reports are related to expenses from the medical industry.  Sadly, this can quickly lead to a less-than-satisfactory credit report.  However, changes in credit agency evaluation and reporting of medical debt are currently in process and are designed to reduce the pain from financial consequences associated with the rise of a healthcare issue.

The three major credit reporting agencies, Equifax, TransUnion, and Experian, will begin setting a 180-waiting period on medical debt before including it on a patient’s credit report starting on September 15th.  The rationale behind this is to give a 6-month period of time to patients to give them the opportunity to resolve and delay in payment from insurers as well as resolving any disputes that might arise between patient and insurer.

Additionally, the three credit bureaus are set to begin removing medical debt from the credit reports of patients as soon as the debt has finally been resolved by a medical insurer; although some models do not currently penalize the consumer for medical debt.

The need for change was spurred on by states working to bring aid to consumers.  The first was a settlement in 2015 that was negotiated by the Attorney General of New York, Eric Schneiderman.  Schneiderman and the three credit reporting agencies came to an agreement and the changes agreed upon will be enacted nationwide.  Currently, most hospitals, ASC’s, and medical providers choose to hire collection vendors to handle accounts once they have become 30-60 days past due.  

A 2014 report from the Consumer Financial Protection Bureau (CFPB) showed that forty-three million Americans had medical debt in collections that was adversely affecting their credit reports.  A noteworthy finding was that the average amount of medical debt in collections was a mere $579.00 as opposed to the typical $1000.00 dinging the credit reports of those with non-medical debt.  Even more noteworthy is the fact that for 15 million of those with blemishes to their credit, medical debt was the only issue for them.

In the era of high deductible health plans (HDHP) which carry an extremely high financial responsibility for the policyholder; it might not be too difficult to understand how this situation has occurred.  It’s clear that many who would previously have had good credit are now faced with a large self-pay portion for health services which can be daunting.

While credit reports are designed to demonstrate the likelihood of a consumer paying debt that he or she has accrued; some credit scoring companies such as VantageScore & FICO have adjusted their models to account for medical debt because they do not believe it is an accurate predictor of whether or not a consumer is a good credit risk.  In fact, FICO has stated that consumers with medical accounts are typically less inclined to default on their accounts than those with non-medical accounts.

Both FICO and VantageScore are now updating their models to differentiate between debt that is medical and that which is non-medical.  Those who have medical debt in collections will now receive a smaller penalty than those with non-medical collections; a change that can make a big difference in the lives of American consumers.  So far, however, the one caveat is that many lenders and banks have not yet adapted to this new credit-scoring methodology.  Because of this, even though medical debt should not be impacting consumer credit as much; for many nothing has changed yet.

 

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