Ralph Bernstein, SVP, Healthcare Payment Solutions at U.S. Bank has been studying the emerging marketplace for specializing banking services for healthcare for a long time. I can tell as he scopes the metrics of this new field. “You know, it would be great if I had a crystal ball to see which of the 200 support vendors will be around in five years. What 40 will be left standing? The industry is so fragmented and siloed.”

I have to agree. Both he and I understand why – it’s just the nature of developing a brand new segment. Medical banking isn’t a fad and it isn’t a new name for an existing program (although it does offer a new way of looking at many existing programs for healthcare). Ralph gets this, and in the process he is helping U.S. Bank to develop the next generation of cash management services (and more). The initial going though, as he suggests, isn’t easy. There are false starts and it’s often hard to get a handle on strategy.

He likens the medical banking movement to his work in travel agencies, a parallel that I find much more realistic than trying to say that healthcare should be as interoperable as ATMs. The emergence of inter-organizational systems across the business landscape are, according to many academic scholars, inevitable. The SABRE system, initially built by IBM and deployed by American Airlines is a great example of how linking the administrative layer of ticketing with the banking system forced a paradigm shift to a point and click generation. What the researchers found is that this type of market activity isn’t sporadic but occurs naturally as two adjacent industries reach critical mass adoption of EDI. Today, you and I get on the Internet to do travel. Tomorrow we’ll do the same with healthcare. But getting there won’t be pretty.

Ralph is thinking on the cutting edge while keeping a close eye on revenues. “We’re all looking for a new platform but it’s a slippery slope. What do people expect from financial institutions? How far do we go into the healthcare complex?” He quickly re-focuses to what I call the end game. “We need to wrap a financial return message to this area. What is the return on investment for wellness programs? What is the ‘ROI wrapper’?” I have to admit, I like the way he bounces between the specialized revenue cycle improvement concepts and the idea of a new health-wealth generation. I do the same thing because the two are inextricably linked. Each, Ralph insists, must have their own “ROI wrapper”. Once you figure that out, you can decide how to move forward into the future…and what feels comfortable is not the same for all banks. Some see payment efficiency as the only area to invest in. Others are looking more broadly to see systemic transformation that leverages many of the operational competencies of a bank.

A great example of this is U.S. Bank’s new retirement planning centers – a branch-focused program that brings in consumers to plan out things like end of life financial needs. The program offers outreach to the community with things like luncheon learning sessions provided at the branch. It’s a great health-wealth play to address what I think could be a tsunami coming our way – consumers who are just so fed up with the healthcare system that they are taking care into their own hands (and many are)…not exactly John Q-style, but rather doing long range planning so they can avoid many of the hassles of dealing with health plans. Banks have the opportunity to tap into this curve through highly specialized services – one of which is establishing a “point and click presence” into every household for all things healthcare. That means giving consumers good healthcare information, letting them set up and pay for appointments online, giving them access to their healthcare record and importantly, tying them into their spend in real time, making all the healthcare transactions as visible and transparent to the consumer as possible. This objective, although not crystallized by banks yet, ties in well with HFMA’s Patient Friendly Billing effort, as well as fueling the “electronification” of all the payment and remittance activity of the provider, patient and payor. It really does come full circle even though as Ralph suggests, there are speed bumps along the way.

Ralph believes that banks can help with things like price transparency, the consumer-doctor interaction and the consumer-payor interaction. He’s passionate about HSAs too, the account-based healthcare plans that are offered by over 1,000 banks today. He sees potential consolidation in the marketplace, like others have indicated. But he adds that HSAs never were intended for the rich to sock away tax free money…and that we should be accelerating the use of account-based healthcare funds like this and not limiting them in the tax code. If you have his vision you can see why he believes this. And I have to think that his mindset is shared by most Americans.

Its time to sever HSAs from High Deductible Health Plans,” he suggests. “This could be characterized as a discriminatory practice because people are being penalized for doing better end of life planning where 88% of the healthcare spend resides. Why?” he quips. “Why not let everyone take advantage of HSAs? Why link it to an HDHP? It denies the benefits of long range planning to most of the population,” he argues. As he speaks my orientation towards HSAs starts to change. Ralph may be right. If we’re asking, from a public policy perspective, for consumers to take control of their health and lifestyle, and clearly we are, then why aren’t we giving them the tools to make that happen? Why are we coupling tax-free healthcare dollars to a health plan?

It’s been an interesting visit. Before I put down my pen I invite him to hear about a new strategy we’re implementing at HIMSS MBProject, bringing four key stakeholders together to create the “healthcare financial network of the future”. He looks at the overview and approves wholeheartedly. “We need to work this thing together to improve the system. This sounds like a winner.” Well, I sure hope so. In the meantime, I’m delighted to meet the person at U.S. Bank who has been supporting MBProject. He gets the big picture, he’s investing in electronic tools that will accelerate the point and click generation and he’s passionate about changing policy to advance the entire domain as a whole.

Just one last item before I end this post. U.S. Bank just acquired 150 new branch locations. Here’s the twist: they were acquired where the U.S. Bank brand is strongest, not in new locations. Why would they do that? Well, they have their reasons…but let me just overlay that data point with my intentions, as a pioneer of the medical banking movement. If we’re going to speed adoption of the health-wealth paradigm, why wouldn’t we use banks who have such a solid and deep commitment to community? What other segment is making deep and long living investments into the community like this? What other segment can reach the lives of today’s consumers along so many touch points, bank branches (free standing and in consumer centers of commerce like grocery stores), ATM locations, online banking, mobile banking, etc.

We have the potential to leverage a powerful platform that can transform consumer mind share towards healthy living. This is a historic time for changing the national mind set – the global mentality from disease management to better health. Banks need to be part of the transformation engine that does this and I feel, and I think Ralph might think too, that we need to pull out the stops for using all of our available resources to advance these important ideals for society…and that means engaging banks. Until next post…

Dean Mason, the new CEO of HSA Bank, is one of the most dynamic consumer-driven healthcare leaders in the country. He has a no nonsense style that is fortified with concrete experience and facts. In fact, he speaks so quickly I can only catch the tip of the iceberg and often ask him to repeat. His mind works fast in his dominant area of focus – HSAs - now even within the name of his new employer…now that’s focus!

“We’re growing,” Dean says, beaming from our lunch table. “We’re experiencing more accounts per sale and greater dollars per sale by moving strategy upstream to mid-sized employers,” he says. Dean was so impressed with the broker-oriented platform at HSA Bank, which he believes is unique to the industry, that he decided to tackle the job of CEO. “We’re empowering brokers with fixed incentives, focusing on operational efficiency and optimizing the end-to-end customer experience where we placed a lot of investment over the past year,” he explains. “Results have been orders of magnitude in improvement.”

He talks strategy in quick bursts. “We knew we offered great value to customers relative to others but people couldn’t experience it because the front door was expensive.” He was referring to account set-up fees. “So we eliminated them.” He takes a drink of water and continues: “Also, we have a large blue collar demographic. Should we expect a blue collar worker to come home after a long day’s work and jump on a computer? Fax and paper enrollment may not be pretty but it’s a reality. So we accommodate all forms of plan enrollment as efficiently as possible.” (So much for the Point & Click generation, but he’s right. Not everyone is ape wild over computers).

Dean is a mover and shaker, so I have to admit that finding him in Sheboygan, Wisconsin seem a little out of sorts. I’m curious about how he’s adapting to his new environment. “John, from field to table the food here is incredible. One of the top ten chefs in America started a restaurant here. Oh yeah, and there’s great surfing in Lake Michigan!” I look at him quizzically. He gets it: “no I don’t do it but its fun to watch!” We laugh!

What drives this high energy warrior for consumer-driven healthcare? “I wanted responsibility for all of product, strategy and sales and marketing and that’s what I got at HSA Bank. We created an independent program with one of the greatest assets we possess – 20,000 insurance brokers and agencies. They can package the program and they got a lot more freedom to meet client needs.”

So I pop the big question that folks seem to be asking these days as healthcare reform packages are introduced on the Hill…what about the future of HSAs? “Consolidation,” Dean says. He believes that unless you get to 100,000 accounts the ROI is working against you. “We’ve seen a first wave of educating consumers about how to use HSAs but now they are mainstream products,” he observes. “The next wave is making the process as seamless and easy to use as possible.”

Customer service is key. Getting to that magic breakpoint seems to be the focus for a number of groups I’ve spoken to about HSAs. For example, I received a number of emails after the Blue Cross Blue Shield Association decided to sell its banking operation. They may not have gotten to the magic number, whatever it is, that worked for them. That may also be true for Arcus Bank that was recently unplugged by Anthem/WellPoint. Interestingly, I received a string of emails suggesting that this turn of events (insurers disowning banks) might impact medical banking. I hardly think so. Medical banking throws a much wider net than the creation of banks by insurance carriers. That’s a potential industry strategy for those that can benefit by it but medical banking is a broader idea…its about how banks engage healthcare. Some of the largest banks in the world are investing in health IT and other areas that are unrelated to a bank that is owned by an insurance carrier. Multiple business models are emerging along medical banking lines of opportunity.

Dean walks briskly down the main street in Sheboygan as cold air whips around us. He continues to hurl out facts and figures about the direction of the HSA industry. As I head to my Jeep, thanking him for lunch, I can’t help thinking that to withstand the winds of change in DC you need to be like Dean; on your toes, thinking fast and making key decisions that could have a lot of impact for a new industry that is clearly here to stay. He’s a great champion for our cause. Until next post…

Over the past 25 years, Richard Clarke has become the friendly, erudite and personable face of the Healthcare Financial Management Association, one of the nation’s most prominent healthcare groups. According to Modern Healthcare, he regularly ranks among the top 100 most powerful people in healthcare. Most people who know him aren’t surprised. He’s very intuitive in the area of healthcare administration and he’s a great communicator. I get the sense that he loves what he’s doing.

Richard Clark is CEO of the Healthcare Financial Management Association

“While healthcare reform is a key area for our group, we’ve found that the primary focus of hospitals today is on preparation for significant changes, not necessarily the method of payment.” He is referring to the fact that while payment systems are filled with conflicting incentives, (like getting paid more based on volume rather than quality), healthcare administrators are tightly focused on other areas like budget, organizing clinical relationships (aligning physicians with hospitals) and technology issues. “Clinical processes are being designed with the patient at the center then structures are being built around that,” he says. It’s reminiscent of the emerging “medical home” concept.

I’m hearing a theme on my tour about physicians becoming employed by hospitals. The current environment is too risky to go it alone so physicians are seeking stability. Dick adds a further dimension to this dynamic. “The days of the single standing smaller hospital may be numbered,” he suggests. “The environment is challenging, capital needs remain high and so I think we might see smaller hospitals joining bigger chains.”

He continues: “Our members are focused on three core competencies: true clinical integration that is measured based on patient outcomes not just physician alignment (did your treatment heal you?); risk management based on cost – a quasi-insurance function that could involve population risk (an idea that was discussed at a recent summit in California - “community-based healthcare”); and, better pricing for services. The biggest enabler for better pricing is information technology.” As the saying goes, you can’t improve what you can’t measure. Along these lines I ask him about bundled payment – is it coming? “In theory,” he replies, “yes…there are pilot programs out there like Prometheus that are showing promising results.”

Before I ask the next question, Dick blows off a little steam. “There is some residual anger at banks because of the difficulty hospitals have had accessing credit,” he says, “some continue to have this problem.” While it sounds ironic given how much time banks spend wooing hospital-clients, its true many have scrambled during the global economic meltdown. “This really has to be more of a partnership to work,” he adds.

His comments resonate. Many communities have two vital anchor points – the hospital, typically the largest employer, and the bank. They are often on each other’s Boards and they have a common interest to improve the quality of life in the communities they serve. If one institution has a problem both tend to suffer. A bankrupt hospital can spell disaster to a local economy. A bank that is tight on credit will intensify operating pressure on a hospital. I find that in many cases there is truly a community partnership between the two, and this vital community axis forms one of the key underpinnings of medical banking. Those that don’t understand this simply don’t get medical banking. At its core, its about community leaders sharing a common concern in their neighborhoods about quality of life issues. How the bank wraps it resources around this critical objective forms the content of medical banking dialogue.

When I interviewed some 125 banking CEOs, healthcare administrators and physicians in 1994-1995, I found that there was often times intense focus by bank CEOs on their hospital clients. Sure, there is focus on other businesses, yet I can’t imagine any that provide $30 billion in charity care each year (per the most recent HFMA report at the group’s Payment Reform Summit in DC where 100 top thought leaders met to dialogue solutions for reforming our healthcare payment system).

Bottom line: leveraging core competencies – one in clinical excellence (care providers) and the other in administrative excellence (banks) – provides a good framework for community collaboration for meeting healthcare needs. Banks are waking up to a much more global context for deploying their assets into healthcare…and I might add that there needs to be more dialogue between the groups so that mutual appreciation of resources and sustainable collaboration can occur. There are compelling reasons for linking banking and healthcare today in new ways, beyond credit and new transaction processing, especially as we switch gears into the “health-wealth” paradigm of the future. Good examples of this are Tenant’s recent partnership with a bank in southeast Florida, opening up bank branches to provide health and lifestyle training to consumers. Other banks in Massachusetts and Minneapolis are also advancing what I call the “advanced community care platform.”

I switch gears to ask about Dick Clark, the person. He’s been on my radar screen since 1994 when I had the pleasure of being a student in a class he taught in Denver, CO. I sense a degree of quiet and well-deserved personal satisfaction in his comments, managing such a vibrant professional association. “I’m constantly impressed by the deep level of personal attachment our members have for this organization,” he says. “They genuinely want to do everything they can to improve healthcare.” As I drive off I think that one good reason why they might is because he does. I’m glad he’s at the helm and working hard to avert the dark and ominous clouds that appear to be gathering in the healthcare industry. Until next post…

It took all of about two days before the board members of Rxaminer and DestinationRx started talk of combining firms after the Wall Street Journal posed a what if scenario about how to get the best drug at the lowest price – and that just about describes the core offering of today’s DestinationRx. So…what if you could go to a single website to find the best drug in the marketplace for your condition, and then find the lowest cost pharmacy to buy it from? Not a bad idea! Its this ability that has catapulted DestinationRx into one of the largest health information exchanges in the country, having enrolled over 9 million patients that use its site for better drug choices.

Toby Rogers, who founded Rxaminer with his father in Chicago in 1999, is quiet and focused. “We think banks could positively impact their asset base in health savings account programs using our technology,” he says. The Medical Banking Project, now HIMSS Medical Banking Project, convened disparate stakeholders around the convergence of healthcare and banking in 2001. By 2003, some companies were joining to promote the adoption of HSAs yet this was mostly a byproduct of a larger trend of technology convergence that MBProject was seeking to facilitate in the marketplace. HSAs and other account-based programs like HRAs have emerged to become an area of focus in the medical banking movement.

Later, Jim Yocum, Executive Vice President at DestinationRx, pops up a power point to explain the value proposition. “We have multi-year data now that shows a compelling story for users of our technology,” he says. My eyes get wide listening to the DestinationRx story. Its an excellent case study with concrete evidence showing savings of over $8 million in one scenario when helping a group of patients to switch to cost effective drugs – not just to generic drugs but to the most appropriate drug with long term benefits.

So…what if you could extrapolate those savings across the bank’s HSA base of customers? Sure banks earn fees on the exchange rate when funds are spent, yet retaining deposits is also a goal for longer term profits in asset management. It all adds up to an extraordinary value proposition – one that we should be talking about more in medical banking circles. Imagine making this tool set available for online banking customers, whether tethered to an HSA program or not (why should that make a difference?). It seems like “just what the doctor ordered” for the bank, employer, payor and consumer – a win-win for everyone, including the sellers of prescription drugs.

Perhaps northeast-based clothier Sims says it best: “an educated consumer is our best customer.” We are entering a health-wealth transformation point in society that involves educating consumers about more wholesome and productive lifestyles. Well established and trusted brands like Wells Fargo, US Bank, HSA Bank and BNY Mellon can get in front of the curve and profit long term. The asset potential could parallel 401ks and early signs suggest that’s the case. Jim shows me the relative value positions of 401k growth versus HSAs and its quite astounding. I ask him to create a white paper on the topic and send it to peer review for presentation at our next Institute.

Toby and Jim provide a great case study of what’s in store for the Point & Click generation. DestinationRx pioneered the first electronic enrollment utility for Medicare in 2004. They will manage medication enrollment electronically for some 1.4 million lives in 2009. Truly they are on the forefront of bringing healthcare online. Leveraging their technology for plan comparison and enrollment (there are 4600 plans available in the government plan that they manage for CMS Part D), banks may be able to capitalize on a great opportunity to increase yield on assets that will not only make their customers happier and healthier, but could add great returns to the bottom line! Until next post…

News…

The Journal of AHIMA found out about my tour and decided to run an article in their November - December 2009 issue. Now there’s a group that can identify with what we are trying to do! We appreciate their support! Check out the article here.

I haven’t talked about the HIMSS acquisition of the Medical Banking Project in my blog yet. Earlier I spoke about a personal experience that put my blog on hold — the acquisition wasn’t the issue but more on that later. Let me talk about the new HIMSS Medical Banking Project.

First of all, its one of the most exciting times of my life. Stephen Lieber, CEO, HIMSS is a dynamic guy and for those of you who have built companies from scratch you know exactly what I mean by saying its hard to let go sometimes. You need a lot of trust, alignment and sympatico. Its not just about business for a social entrepenuer, especially for a firm that was as small as MBProject. If you asked me why I did it I would tell you its because of Steve. He’s a dynamic guy who is often quiet and unassuming. And he studies his subject well. He was able to walk me through the process. He didn’t need to sell me on where HIMSS could take MBProject. I already got that…and now I’m in charge of it - humbling. As he started to introduce me to his team it got even more exciting. I already knew Pam Matthews, who really formed my first very positive perception of HIMSS. I met Norris, COO, HIMSS, department heads and my fellow SVPs. For being such a large organization, it is very agile. They focus on communicating well, organizing and employee satisfaction seems to be a big area of interest as well. I really like what I’m experiencing right now.

Over the years I became convinced that if we’re going to globalize our message, HIMSS would be the right organization. I truly believe this is an incredible thing for the membership and for the advancement of the medical banking industry. We have a positive contribution to make to society by leveraging banking and financial institutions to improve global healthcare. There are multiple areas of opportunity - privacy and security, compliance, cards, lockbox, credit, branch systems, mobile banking, microfinance and many other areas. With HIMSS we have a global platform and we already have plans to leverage this in a powerful way, transforming the marketplace around a key issue - the “Healthcare Financial Network of the Future”.

What is this network? What does it look like? Will it remove inefficiency from the healthcare system? Will it liberate data that can be used to populate PHRs that are tethered to 55 million online banking accounts? Will it help to educate the emerging medical consumer and help people to live healthier lifestyles? Now that’s thinking outside of the box. My view? The answer to all of these questions is a resounding yes! We already see signs of this happening in the marketplace, many documented here in the Tour blog.

I want to challenge banks, financial institutions and healthcare groups to become part of this grand movement that will usher in the new “health-wealth paradigm”. Its a great vision that is global in scope, and with HIMSS we will gather the stakeholders that can energize and facilitate the adoption of medical banking principles everywhere. So yes, I’m bully on the acquisition. Its great to be part of the HIMSS organization! I truly believe we can, and should, create a better world. We need to start somewhere, and with multiple efforts already well underway HIMSS MBProject now adds another key building block that can enable society to reach a new reality, where we don’t have to talk about a healthcare system that is on the brink of disaster. Imagine that! And if you’re not asking that question, the real question is why aren’t you?

Let’s make a difference! Until next post…

The Bank of New York Mellon is the world’s largest custodial bank with some $22.1 trillion in assets under custody and administration and $966 billion in assets under management. The group has four core areas of focus: asset servicing; asset and wealth management; issuer and clearing services; and treasury services. The company is headquartered in New York, but maintains a prominent presence in Pittsburgh. Even with such impressive credentials, I find the staff to be highly personal and engaging…and that stems from the top down.

Take for instance Alphonse J. Briand, Jr., who is the division head for treasury services product development and strategic development. He’s big picture and animated. When I ask him about banking entry into healthcare he speaks with passion, enthusiasm and commitment. It’s personally rewarding to see such a high level person engage this topic. He communicates strategy in clear brushstrokes. “We look for business opportunities that are scalable within the global context, are large enough to support a viable growth strategy, and give us an opportunity to add value to the services we provide. We think healthcare fits this description.” Al talks about “walls that are coming down” as the global community addresses common concerns like healthcare. He is passionate about solutions that “have impact beyond our borders” to address nagging chronic problems in the global healthcare community. He points to building blocks at the bank – a series of core competencies – that can be arranged to meet critical needs in healthcare. These include technology investment, specialized cash management, a culture of exceptionally tight security and privacy, wealth management in the era of new consumer-driven healthcare programs and more.

Tony Gandolfo, who joins the discussion from BNY Mellon’s New York location, agrees. “We want to position our resources to help our clients meet their business objectives and we are finding that our core competencies in transaction processing, information management and other areas align extremely well with the emerging needs of the healthcare stakeholder.” His comments resonate well with federal discussions on health care policy, seeking to improve health care through strategic use of health care information technology. Indeed, BNY Mellon is embarking upon a broad strategy to capture what is becoming a global dialogue to move healthcare into the 21^st century through technology. This vital dialogue is the topic of numerous summits where health care ministers are grabbling with excessive costs to care for people in the community.

Maureen Turo, who has overseen and facilitated the development of content in medical banking as President of the Medical Banking Institute, joins the discussion. “Treasury Services took the lead at BNY Mellon organizing an effort to specialize into the healthcare segment; our initiative has grown to include a number of other BNY Mellon lines of business.” Her comment is typical of many banks that start walking down this new way of looking at healthcare – the intersection between banks and healthcare. I really believe that while the journey has started, we have miles to go. Medical banking is a journey. Administrative inefficiency, for example, is so common in healthcare that there a multiple opportunities to leverage banking programs to create value, from credit disbursement to payables and receivable automation to specialized credit and card programs, online banking and much more. It’s truly a new field that is ripe for engagement.

Ken Kubala, senior new business development manager at BNY Mellon, has been sitting quietly in the corner of the room. His eyes are lighting up as we talk about new programs in medical banking. Ken has been leading the creation of a new Gold Seal privacy and security accreditation program at MBProject. He received MBProject’s Person of the Year Award for his persistent effort in this vital area…its not just about creating a new technology platform to move us to a Point & Click paradigm, but first we must ensure that it will be built on a platform of trust. Ken gets this. But today he’s focused on payment processing, especially in the European theater.

“SEPA, the European platform for payments processing, is walking down what I think should be a similar pathway for managing the myriad of healthcare payments in America,” he suggests–Standardization is the key. Al Briand nods and adds that SEPA really is transitioning the European member states from siloed payment platforms that conduct state-wide payment processing (Germany, Switzerland, UK, France, etc) to a general processing platform that can move funds efficiently across borders. Along these lines I inquire about SWIFT because I know that Al Briand has experience in this area. He briefly reviews its evolution and comments on a recent discussion with SWIFT that focused on the value to financial firms to work towards seizing opportunities to use the network to more efficiently handle common utility functions. The discussions need to continue to find the right applications and the right level of capability via SWIFT.

I agree. The medical banking movement is in need of a common platform that delivers value to employers, consumers, providers, payors and many of the other stakeholders. It’s a complex area, so to help banks engage this area and thus facilitate general uptake from large academic health centers to solo practitioners, an enabling platform is required in my view.

The affirmation in the room is gratifying. I feel like Don Quixote at times, on a mission to evangelize the medical banking message…

Al quickly stands up to race to his next meeting at 5:00 pm. He shakes my hand and affirms that BNY Mellon is solidly on board and leaves the door open for assistance. The group departs, and I leave BNY Mellon feeling a bit humbled by the task ahead, merging the mammoth industries of healthcare and banking to facilitate and create new value that can improve global healthcare. I feel a lot better addressing this challenge with groups like this displaying a genuine interest in helping. I can’t help but feel that many hospital CFOs and other healthcare business groups would also feel good about this type of commitment from such a major financial services company.

A clear message is emerging from the Tour…medical banking is inevitable. Finding viable programs that can leverage economies of scale built into technology platforms in banking, that expand beyond state borders to advance a common platform, leaves healthcare as a solid contender of bank-derived investment dollars. Banks can improve healthcare at home and abroad, and this is becoming a compelling global objective for many groups, employers included.

Material from HFMA’s recent Payment Reform Forum in DC, that gathered 100 thought leaders on the topic, shows that US corporations suffer because what they pay $1 for in healthcare is matched by what G5 countries (Germany, France, etc) pay $ .63 for. And it gets worse when you look at Brazil, India and China ($ .15 versus $1.00). With the stakes so high, investments in information technology that leverage core competencies in banking to improve healthcare will clearly increase. This is critical path for society, government, healthcare and I believe, banking.

The team at BNY Mellon and the groups we’ve interviewed so far form the early leadership of a global medical banking program to ramp healthcare online and create new value for communities around the globe. Until next post…

Wells Fargo & Company is one of the most prominent brands in America. Its East Coast headquarters is in Charlotte, NC., the former headquarters of Wachovia, where I find myself walking through a busy office to the conference facilities. Leading the way is June St. John, Senior Vice President and Healthcare Product Manager at Wells Fargo Treasury Management. June and I are joined by Margaret Sheridan, Treasury Management Marketing and by phone from the bank’s Dallas location, Justin Freeman, Manager of Lockbox and Healthcare Products listens in.

My first impression walking into a bank, and I surveyed over 120 banks nationwide in 1995 before carving out the medical banking niche, is how focused they are on customer service. It seems that everything that can be done to make the visit pleasant is being done. It reminds me a bit of an upscale hotel chain. They constantly emphasize the importance of serving the customer. Its much the same way in banking.

That kind of mind set, serving the customer, is playing well in modern healthcare as we trend towards medical consumerism. The bank invests heavily to establish consumer mind share and to perpetuate brand through multiple venues and activities, community support, business support, advertising, consumer-friendly websites, branch locations and more.

Medical banking is a lucky recipient of an already budgeted spend to reach the consumer and I try to emphasize this point when speaking to groups across the country. We can build the next generation healthcare platform to link consumers to digital health programs but who will invest the money to speed its adoption? Banks already invest in moving consumers from offline to online banking. Why not use a platform that is already targeting consumer adoption of online platforms?

Before we get started, June tells me that Marion Manchester who heads Healthcare Sales for Wells Fargo Treasury Management, left a message for me: “Tell John we’re out on the road electronifying healthcare providers”. I love that message because I truly understand what she’s saying. I’ve been there before. I know that selling a new value paradigm like medical banking requires expertise and persistence. It’s not easy. We truly owe it to the road warriors that are selling this program to make this innovation happen.

The issue reminds me of a post I received on Twitter from a person who said “you don’t get what’s happening on the street.” She was talking about how people are trying to do their healthcare with no insurance, no support, etc. I empathize with her, having at one point been uninsured for five years trying to create the medical banking concept, but I want people like her to know about the enormous efforts of banking groups who are on the road – countless meetings, re-groupings, re-architecting message, PowerPoints, etc, to explain the benefit. The work they are doing will result in substantial benefit. The savings that are realized by a specialized lockbox platform, for instance, can support indigent and charity care to the tune of $35 billion or more. The typical hospital will realize operational savings not as money in their hands but as increased capability to manage cases in the emergency room, for example, where many uninsured go for treatment (whether good or bad it is reality).

My first question to the bank is about the goals they are trying to achieve in healthcare. “We’ve been looking a lot at healthcare and we routinely do this to determine how to support our customer base,” Justin replies thoughtfully. “A large portion of what we do is responding to their needs. We are part of the fabric of the community and we take our queue from our healthcare clients as to what we can do to help them. This spans from associating “data and dollars”, specializing lockbox programs, reconciling funds more efficiently and more.”

“And it also includes the consumer dimension,” June adds. “We look at using our programs and infrastructure to serve their interests, like point of service payment processing, how to connect to Health Savings Accounts products, card products that improve working capital and other areas where we can add value.” This includes a new program offered by Wells Fargo for online banking customers that allows individuals to store their health records. I’m interested in this because it’s the first program I’ve heard of that addresses a key point of the Point & Click Expedition – driving healthcare online for consumers.

I end the interview by asking about the integration of Wells Fargo and Wachovia. Today the group is integrating the best of what both brands do – multiple lines of business for healthcare and support for the sales effort. Considering the substantial reach of this newly merged organization, and its potential to improve healthcare using medical banking programs, I wish them the best and look forward to what the future holds for harnessing their national foot print for bringing healthcare online. Until next post…

—–

On a more personal note…

Its been almost two weeks since my last post. I was called into a family emergency that was the most painful healthcare and life experience I’ve ever had. I will write about this when I’m ready. In the meantime, I believe its so important that we push forward…and we need to understand our leadership in the global stage. Regardless of where we rate in quality among nations, the world takes its queue from our debate in healthcare - the things that we are looking at and how we’re trying to solve problems. Our fight to save our healthcare system is local but the impact of our debate is global, and I saw this first hand in the island of Puerto Rico. Until next post…

“Its funny,” Sheila Schweitzer, Chair/CEO of CareMedic chuckles, “I can plan a whole wedding online but trying to work with my insurer to fix my eye problem was something I just couldn’t do. I finally just picked up the phone.” Sheila, a highly influential player in bringing healthcare online, invited me to lunch at a restaurant in Vero Beach, FL. Dockside Grill is nestled on a beautiful enclave where the Atlantic sends waves of clear blue water into estuaries lined with sailing vessels. “Yea,” she says, “this is a great place to live.”

CareMedic, a key player in revenue cycle management that helps providers to manage cash flow, has a simple motto: “get paid”. Its as simple and direct as Sheila is. When I ask her how we can bring healthcare online she counters “well, what does online mean? It almost sounds like ‘meaningful use’!” She’s referring to A.R.R.A., a bill signed into law by President Obama that earmarks some $20 billion for health IT. It has spawned a hot topic in conferences around the country that will examine, over and over again, the intent and meaning of those two words – “meaningful use.” If a technology company fits into that mold they could have a shot at some of that money, so this will continue to be a big issue in bringing healthcare online (whether that’s good or bad).

Even though Shiela jokes about the definition of the term, she has a good idea of what bringing healthcare online means. CareMedic serves over 1500 hospitals, 1000 ancillary facilities (MRIs, outpatient surgery centers, dialysis centers, etc) and over 155 large clinics. She has a long history of digitizing healthcare transactions, from running the EDI area of a large insurance company in Kentucky to working for Envoy Corporation around the time it scooped up N.E.I.C., the 800 pound gorilla that enabled critical mass for electronic claims processing. Sheila oversaw other acquisitions too – point solutions that enable things like online eligibility and automated remittance management. She understands many of the challenges of moving healthcare online.

I try to get a personal snapshot by asking about her hobbies. “I love walking my golden retriever on the beach…and golfing! That’s about it!” When I try to explain why I think her leadership in medical banking is important she looks down and says, “well John, I don’t know about that.” I’ve told her that before and always get the same reaction, so I move on, pressing for her views about our ‘point and click generation.’

“Consumers want convenience”, she says. “If its not convenient its just not valuable.” I ask her if CareMedic, primarily a provider of business tools, will help consumers digitize their healthcare experience. “Yes,” she says, “we’re looking at the payment process, tools that finance healthcare and other areas.” She believes we’ll see a major shift in how we pay for care and conjectures that we might be a generation away from true consumer-driven healthcare.

She then points to one of the major hurdles for moving healthcare online. “Healthcare is filled with point-centered solutions that aren’t enterprise-oriented. We need to connect silos to see the true picture. That means linking the fragmented IT areas of lab, radiology, doctor’s notes and other key areas. Point solutions tend to solve an issue, not a problem. We need to re-orient technology to provide the comprehensive picture, especially when you talk about the consumer.” Consumers want access to their information…and as quickly as possible (thank you). Sheila says we need to address key areas like identity management (that validates rights to a record like we have in online banking); standards harmonization among information technology vendors and evolution of payment programs that create incentives that steer the market.

Sheila, who started our talk trying to finish an important teleconference, is off to the next. Her blue tooth receiver is flickering as she adjusts her blackberry. As I wave good bye its clear to me she holds a key for ‘point and click’– maybe via consumer-authorized tethering of her technology platform with banks so consumers can gain much needed visibility into payments and other health records. Until next post…

“If we’re going to get healthcare online in the next 10 years banks need to be part of it.” Until I heard Bobby Smith say this, CEO of SSI Group, I wasn’t quite sure how he felt about medical banking. He asks Debbie Short, a well regarded industry executive at SSI, to join our discussion. “The model is growing slowly for now,” she says. His statement, towards the end our talk, catches me off guard but I probably shouldn’t be surprised. He’s invested in medical banking and sees the link between banking and bringing health records online yet freely admits the process is slow.

The SSI Group is a remarkable success story. The firm has mostly grown organically; not through acquisitions. They provide electronic health data services to over 2,000 hospitals across the country and others too. I believe they are a critical path player for moving healthcare online so I’m very interested in what Bobby has to say today.

Bobby is relaxed, reflective and congenial. He’s a world traveler who enjoys a good book and likes to garden. Maybe it’s the Mobile, Alabama mind set where he’s from, I don’t know, but his low key manner doesn’t match the wide-ranging impact of his work. He’s done an incredible job of steering SSI into a national entity. He tells me about a new hospital installation in Alaska and how his staff chartered a small plane, promising to bring back supplies on the return flight! “That was interesting,” he says with a chuckle. Yukon Hospital went online in three weeks…not bad! Another hospital learned about it and signed up in this frozen state nicknamed “the last frontier.”

Its a beautiful day in Mobile, Alabama, where SSI is located.

Speaking of rough places to fly in and out of what about Mobile, Alabama? It’s the proud home of SSI’s corporate headquarters. Good thing I’m driving! The surroundings are an impressive blend of Victorian homes and streets lined with old trees laden with Spanish moss. SSI’s building elegantly reflects this style, quietly housing a healthcare ‘digital empire’ of sorts. The dichotomy – old world/hi tech – piques my interest.

The marketplace seems more excited about in-house conversion of paper than handing it over to a bank lockbox, Debbie says. Her comments touch upon the theory of ‘disruptive innovation’ – clients are gained one-by-one even though the value of a new program is proven. It’s just the nature of changing a conservative industry. It takes persistence and patience to sell the program, and the ability to package programs accurately (in-house programs can leverage bank technology too).

In 2007, SSI and The Bank of New York Mellon (BNY Mellon), a major global bank, teamed to create one of the first inter-organizational systems in medical banking (see press release). BNY Mellon, eyeing the scale of SSI, saw an opportunity to meld treasury management services with a full suite of health data services that help clients transform paper-driven processes to a digital platform. Today they are learning how to position this platform and also how to move improve things like point of service payments. Another area they may find worthwhile is linking electronic health records with online banking. That’s where Bobby and I share a common view. Hopefully it won’t take 10 years! Until next post…

Richard Mobley stands tall in many ways. He manages the medical banking product line at BancTec, a global banking technology and solutions firm. At 6 foot 7 inches, I have to ask “how’s the air up there?” He chuckles and says “being tall is the only thing I do well.” He’s also standing tall, and firm, on one of the key issues of our time – medical banking. He’s crystal clear on this point. “The last un-electronified domain in the healthcare business office today is payments. BancTec is fully committed to fixing that.”

Richard is a passionate warrior for the cause and with the better part of 30 years working to bring healthcare online he’s no newcomer. Earlier he helped to create a major clearinghouse (eventually acquired by Allscript-Misys) that digitized the medical claim – the bill that goes from the care provider to the health insurance carrier. Today, he emphasizes, its time to address the trip back. He’s referring to the frustrating trail of paper associated with payments that follows every patient visit.

My discussion with Richard touches on our mission to help families struggling with healthcare if we do medical banking right.

“EDI (electronic data interchange) revolutionized the flow of claims to the insurance carriers; now its time to make this happen on the back end.” Our mission at MBProject to “convert digital savings into charitable resources” resonates for people like Richard. He understands we have an historic opportunity to convert the immense cost associated with medical payments (some $35 billion annually) to funding healthcare. We can transfer this value to providers who are dedicated to improving the quality of life in the community.

Richard challenges the status quo. “Ask any healthcare provider if they would go back to the pre-EDI days for claim submission or for that matter, if they’d be willing to shut off the Medicare electronic remittance!” Lights out in this area wouldn’t be pretty. Providers get this, but are just warming to the idea of using a bank lockbox to automate the rest of their remittances.

My studies on the issue go back to 1992 after building a specialized lockbox for a small hospital in Langhorne, PA. The benefits of digitizing payments at an existing collection point – the lockbox – are clear. The model can improve the provider’s cost structure for revenue cycle technology, off loading this to the bank versus each provider paying for the same technology. The bank, working with health IT firms, can spread the cost to numerous providers, offering online/modular services for cash posting, secondary billing, denial and contract management and more. At the same time the bank offers economies of scale that can help submitting health plans to eliminate the paper altogether, creating the often dreamed about end-to-end efficiency in administrative simplification.

Importantly, this “industry fulcrum point” can fast forward the “point and click generation” in powerful ways. Data flowing through the channel can improve operations, empower patients to manage their healthcare spend and ultimately, impact cost, quality and access to care in the community. It empowers providers to capture untapped value for continuously improving the business of healthcare. This last point energizes Richard.

“If my wife gets sick I want the doctor and his staff to deliver the best possible care. Instead of pushing paper the doctor could spend more time with her and that’s real important to me.” Richard brings the point home. “Medical banking has a direct relationship to quality of care. The opportunity is real and we can make it happen.” I link his thoughts to an earlier post (see “Connecting the Dots”) – a 12 year study showing the average time spent by physicians per patient is 8-10 minutes when it should be closer to 45 minutes.

I also link his thoughts to how MBProject showed that medical banking is a “green” issue (see press statement), now picked up by other groups. While medical banking takes immense paper out of the system and saves trees, it is more importantly a quality of care issue - a point MBProject stresses in a new legislative platform that Richard helped to develop as a workgroup leader. If we add up the time providers spend “mucking” with the constant stream of papers that frustrate the reimbursement process the total would be incredulous. What if we can reclaim just 10% of the millions of hours spent by 700,000 practicing physicians, 6,000 hospitals and other providers (dentists, nursing homes, DME providers, others) on the paper chase? How much quality can we bring back into the patient experience?

“Wouldn’t it be great if we returned back to good old customer service?” Richard says with passion. “What if the doctor’s office called and said they were running 30 minutes late so don’t rush. Instead we spend this time in the waiting room! What if we can drive automation so that Harry or Sally at the doctor’s office can focus on customer service?” Now that’s an issue that any one can stand tall on.

So…how do we get there from here? Yea, its complex but if we can send a man to the moon and back we can digitize a round trip for any medical claim. This relatively new and unknown area – medical banking – has deep and rich benefits. Key areas for improvement are digitizing the paper chase, tethering medical records to online banking, utilizing bank branches to create “health-wealth” coaching programs and more. We’ve only touched the surface.

Richard gets it. He understands that medical banking isn’t just about transactional efficacy, although that’s a major goal. It’s about empowering physicians and bankers to join forces to improve care and enrich the quality of life in communities they serve. He and I spend some time visioning how to ignite adoption by two large industries – banking and healthcare – that typically move slow…and we both have that gleam in our eyes like yea, we can change the face of healthcare if we get this right. Until next post…

Cessna photos line the walls of the new ClaimTrust facility in Murfreesboro, TN, where CEO Joe Ferro is pacing the floor. He’s a pilot at heart and he’s very busy. I chat with his long time assistant who kindly presents me with a golf shirt with the ClaimsTrust logo. Joe is a burst of energy as he swings open his office door. I’ve known him for twenty years. He’s a health IT die-hard who is a stickler for details. He is anti-vaporware (software that just doesn’t work). So when we talk about bringing healthcare online, he’s got a few opinions.

Joe moved his company from Florida to Tennessee where he built a new facility. He's glad he made the move! Click on his pic to see his new website.

“John, we need to get the legacy system vendors to the table,” he says when I pry into his thoughts about moving to a digital platform. “Sure we’re all moving data in and out of the mainframe but to really fast track interoperability and health data liquidity the big systems need to be at the table.” He’s talking about the McKessons, Siemens, Meditechs, HMS’ and others who are the core systems in every hospital.

Joe brings hard core experience to the discussion. His new facility has garnered a number of accreditations and local accolades as well. He marches me into the digital brains of his operation after passing through double-enforced concrete walls and two heavy doors. Its impressive - over 50 robust servers are operating concurrently as air conditioners keep the temperature down. Everything is intricately organized down to the wire. I’m getting pretty familiar with the security layouts of data processing centers in my tour. In his facility everything is electronically logged and recorded. This truly represents the backbone of the emerging digital world. Amazing.

Joe’s primary effort is assessing fraudulent or abusive healthcare claims. In the mid-90s, he and his wife Kathy created a mammoth database comprised of the CCI (Medicare correct coding initiative) edits, LMRPs (local medical review policies) and other standards. Each claim that is introduced into his “black box” will undergo some 40 million editing permutations in sub-seconds to determine if its bogus or ok.

This is a good pointer in our “point and click expedition”; namely, that as we move to a digital platform its critical to ensure the appropriate checks and balances are in place for auditing the movement of data, and that the data is not fraudulent! The integrity of data is important, whether its claims coding analysis or determining where, when, why and how our personal information was exposed. Like the firms I spoke to earlier, Joe’s interest perks up when I mention our Gold Seal program. “Mark me down for that” he says.

Core to Joe’s business is claims coding. A medical claim is comprised of codes that are used to describe what happened during a patient visit. The codes are linked to payments and are tallied up to arrive at a final bill, sort of like a grocery list with product codes and pricing (for the consumers following our post). Up to 5% or more of all medical claims are considered “abusive” according to OIG standards (US Office of the Inspector General). That typically means they are overpaid – and the experts say such overpayments exceed $60 billion annually. Joe’s system detects this and alerts the sender of the claim – the healthcare provider – that there is a problem.

An area receiving a lot of focus today is the CMS “RAC” (recovery audit contractor) audits. The government is bulking up the program because it has successfully found billions of dollars in overpayments to Medicare providers. Joe is perfectly positioned to do this kind of work, providing a digital node in the health data highway that does the truck-side checks – making sure everything is legal. In the grand scheme of our emerging “digital highway”, that’s what ClaimTrust brings to the table. The name of the company truly tells the story.

Joe’s company adds a critical building block to the “health data grid” – trust and accountability are key to the point and click generation. His work fits his personality as a pilot who is absorbed in mitigating risk so that take-off and landing are flawless – 100% of the time. That’s something we all understand…and expect! Until next post…