By moving towards cash payments in healthcare, we can reduce costs, increase access to care, and empower patients to make informed healthcare decisions. In this episode, Louis Bernardi interviews Korb Matosich, Co-Founder, CEO, and Board Member of Asserta Health. Together, they explore the benefits of cash payments in healthcare for both patients and plan sponsors. Korb shares insights on how cash payments can drive better outcomes and create a more efficient healthcare system. He also talks about Asserta Health and how it is built on the foundation of making affordable healthcare through paying directly, transparently, and immediately. He shares about medEcash, Asserta Health’s innovation to provide a real-time cash payment platform for high-cost medical care for covered members. Louis and Korb then go on to address concerns about healthcare affordability and accessibility and what can be done about it. Whether you’re a plan sponsor or a patient looking for more control over your healthcare spending, this episode is not to be missed. Join us as we explore the benefits of cash payments in healthcare and how they can transform the way we approach healthcare financing.
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Patient Savings 101: The Power Of Cash Payments In Healthcare With Korb Matosich
Benefits With Friends Season 2, Episode 11
We have an interesting great topic and guest, Korb Matosich. He is the Cofounder, CEO, and Board Member of Asserta Health. Korb, welcome.
Thank you very much for having me. I appreciate it.
This isn’t a Hollywood or live TV broadcast. There are not a lot of slides or things like that. I started to introduce you, but I want you to be the one that introduces what Asserta Health is. Talk about your background a little bit because that is interesting and brings a lot more clarity and validity to the conversation, so what you have seen, where you have been, and how you got to where you are now.
My background is I have been in healthcare for the last twenty years or so, ever since I got out of graduate school. The entirety of my healthcare career has been focused on the exciting topic of healthcare payment, which people love to talk about. It’s the life of every cocktail party. I started my healthcare career at a company called Ingenix, which is now known as Optum, a part of the UnitedHealth Group family of companies. Even though I was part of UnitedHealth Group, I started on the provider side of things. I managed their revenue cycle management business. I did that for several years. I’m working with large provider organizations to accelerate their revenue cycle and payments.
After doing that for several years, I was asked to switch sides and I took over their payment integrity operations. I was still at Ingenix but now managing the flip side of the coin which is paying claims. I got to see healthcare payment from all angles, from a provider’s and payer’s perspective. I arrived at the horribly obvious conclusion that healthcare payment doesn’t work well. Anybody that is paying attention can easily conclude that. I came to the conclusion that it could be better and different.
When most people think about healthcare payments, they don’t believe that. They believe that the entrenched third-party claims-based reimbursement model is all that there can ever be. Asserta Health was founded and created to deliver a better way to pay for healthcare. What we do is facilitate immediate cash payment for healthcare services. We are trying to create a retail-like purchasing model where price points are understood in advance, but providers are also paid when they deliver services.
Our audience out there might be CEOs and HR directors. I know that there are other people in the industry like advisors, brokers, and maybe carrier reps. For a very long time, because of the business model of healthcare and health insurance, the consumers and the employer plan sponsors, and their employees become patients when they enter the healthcare system. This is all happening behind the scenes. Why is this even important?
Out of college, I wrecked a lot of industries. In ‘89, when I graduated from St. John’s University with a Finance degree, it was in the wake of the Wall Street crash of ’88. I thought I was going to be in finance and stocks, and I was going to make it big. Instead, I took a left turn and I ended up at a large radiology practice in New York, working in the controller’s office. There were four of us and we did everything. We did medical billing and claims. We collected the receipts.
Back then, most people paid by check or cash for MRIs that were several hundred dollars at the time. They were getting more expensive. They had a captive audience of people coming every day. As a 24 or 25-year-old, I didn’t like what I saw. I saw what I perceived as abuse. I was calling collections on people. There is a chapter in my book, if it ever comes out, that talks about these weren’t people who weren’t deadbeats. These were people that wanted to pay their bills. They were embarrassed by not being able to pay their bills.
This was pre-managed care. There were no networks at the time. These were indemnity plans and Medicare patients. They were struggling to pay what was still an unexpected bill. They didn’t know. Many of the people who were there didn’t need to be there. These were deals that the doctors were making. They said, “We are going to funnel our patients there.” They are probably getting kickbacks.
It shed some light for me on the medical billing part of it because the doctors were doing well, but they were still a significant amount out in collections that they were never going to collect. If they were, it was going to be pennies on the dollar. It was a big problem 30 years ago. The patient relied on what the insurance company approved. They didn’t know what that dollar amount was ahead of time. They went and got an EOB. It is a little bit less complicated than now. It is like, “Here is what it costs. This is what we approved. This is what we allowed. This is what your plan paid. This is your responsibility.” That process has not gone away.
Managed care has escalated the amount that is out in collections today. The pay-more get-less every year cycle of watering down the benefits and increasing out-of-pocket costs on members has resulted in people walking around with HSA style or HRA style plans or high deductible plans, with no way of paying that out-of-pocket cost if it comes up on them unexpectedly. They know what they can afford. There is a lot of education involved in making the right plan selection at open enrollment.
You have seen behind the scenes how has that impacted both sides, the payers’ and insurance carriers’ process in that? You have been doing this for twenty years, which is right around 2000. Managed care was here for about ten years at that point. It is still pretty low by the standards and has low out-of-pocket costs for most people. It was right around the ACA. A lot of the ACA mandates hadn’t hit home yet. You did that for how long? What dates are we talking about, from around 2000 until when?
From 2003 to about 2011 was the rough timeframe. I was focused on more traditional healthcare payments, revenue cycle management for providers, and payment integrity for payers. I was in the middle of all of that for that time period.
When you say payment integrity for the payers, you are talking about the insurers. I’m assuming that was the medical loss ratio, which I’m sure you are familiar with. If you are out there and not familiar with the medical loss ratio, it is a component of the Affordable Care Act or Obamacare that changed the math in the way insurance carriers managed their profits.
There was a time pre-ACA when you could argue that the less the insurance carrier paid out, the more revenue they kept. They collected $1 billion in premiums. That is a small number. I’m just using that. They paid out half of that. They had $500 million in profit. Under the Affordable Care Act, the medical loss ratio caps its earnings percentage on a percentage of the billed premium. You could argue that the insurance carriers have no incentive to pay out less.
They have an incentive for their profits to go up. Since it is a fixed percentage of the premium, the only way profits go up is if the premium goes up
The only way premium can go up is if claims go up. They have to pay more to justify the higher premiums, especially in the small group market, which is typically under 100. It is a huge component of the industry because most businesses by volume are that small. The large group is a little bit more complicated. Did you see that shift? Were you conscious of the payer’s integrity? Did it change in any way around 2010 to 2011?
The visible face of it didn’t. In my opinion, and other similarly experienced industry folk confirm this perspective, payment integrity activities have been communicated by major carriers to be taking place for as long as I have been in the industry, pre predating me. We do all of these activities, but when push comes to shove, the carrier is much more concerned about safeguarding its money.
It is much more methodical and careful about managing a fully-insured business than a self-funded business because they keep more of the profits because it’s a funded plan. If you save in the self-funded plan a lot of money, you are benefiting your client. I don’t want to make it sound like they are intentionally trying to defraud their client. I’m not making that claim. I am claiming they are not that concerned about protecting other folks’ money. They are much more concerned about protecting their money. It doesn’t have anything to do with payment integrity. One thing about network contracting that is not commonly known is if you look at any major network, there is not one network price. There are multiple network prices. They keep the best one for themselves and then there are various tiering.
As an ASO client with a carrier, it is great that you get access to the United Network or the Cigna Network, but you are not getting their best discount. They are keeping that for themselves. They work with the hospitals to trade-offs. They were like, “We are going to get you paid more with these other folks and their money. When we are paying the bills, we are going to pay you less.” That is a real dynamic. That dynamic plays out across the broad spectrum of their responsibility for paying. They are safeguarding their interests first and your interests secondarily.
From a fiduciary standpoint, insurance carriers have a responsibility to their shareholders at the end of the day. They have to have the perception of working in the best interest of their client. They do in many ways. The show isn’t about bashing insurance companies. It is about educating the consumer, employer plan sponsors, patients, and employees of businesses so that when they select their health insurance plans, they can make a more informed decision.
What is crucial to me is that as an employer, you are paying a tremendous amount of money. You should have a better understanding of how that money is being spent and where it is being spent. You should insist on having access to that data like what you are paying for MRIs and CAT scans. Let’s talk about Asserta Health. You have a great background to explain everything that you have seen, and what a credible person you are to talk about the approach that Asserta Health does. This is not an advertisement for Asserta Health.
There is an entirely separate universe of healthcare and health insurance out there that doesn’t get to most employers. They don’t see what’s happening behind the scenes. When I say healthcare systems, I’m not talking about the hospital systems because that is another problem, but doctors and practitioners, especially the independent ones who struggle to stay competitive and independent, and provide real value to their communities. Introduce Asserta Health. I want to shift into that conversation.
You mentioned an important word about fiduciary, and you did it in the context of the carriers having a fiduciary responsibility to their shareholders. The plan sponsors have a fiduciary responsibility to their plan members. To a large extent, that has been ignored historically. One of the trends we are going to see here in short order is the type of lawsuits that held 401(k) plans accountable in the early 2000s. These are going to come to health plans.
Employers are going to be held accountable by the folks whose money they are taking because their employees are contributing to the funding of their care. They are going to be held accountable for how those assets are spent. I would make the argument that just going with the PPO network is not a good way to execute your fiduciary responsibility. You are going to have to be more thoughtful and careful.
A few weeks ago, the show got canceled. I was going to have a guest on, which we will have on again soon. He is from the pension side of the industry. It’s not healthcare. We are health and wellness experts. He is a pension expert. He has lived through compliance, nightmares, lawsuits, and fiduciary responsibility. It is important for the plan sponsor. When we say plan sponsor, we mean an employer that is offering a health insurance plan to their employees.
The Department of Justice, the Department of Labor, the IRS, and all of these entities are involved in all these compliance and regulations. A lot of times, the plan sponsor isn’t even aware of these regulations because the people who they entrust with their health and welfare plans aren’t responsible for these things. We know that the Department of Justice is looking heavily into pharmacy benefit managers or PBMs. What they do is despicable to drive up drug costs, which are killing people because they can’t fill their prescriptions. My estimation is 100% markup with rebates and spread pricing.
They can make them accountable for their business practices, but the regulators are going to come down on the plan sponsor because they cannot mandate a third party to do something. If you are the plan sponsor and you are going out there purchasing a health insurance plan, it is a buyer-beware now. You cannot pretend to be ignorant and pretend you are not hearing that insurance carrier discounts are a complete smoke-and-mirror game. They are not getting the best prices. Could they? Yes, they have the leverage to do it, but it is not in their best interest to do it. It is not in your insurance carrier’s best interest to get you the best price for prescriptions for radiology services. It’s not in their best interest to guide members to the highest quality care
This is important. Hopefully, ears will go up when HR directors and CEOs signed the $5,500. That is going to be the person with the fiduciary responsibility at your company. You cannot blindly follow the status quo anymore. I’m not saying fire your broker. I’m saying educate yourself enough so that you know the right questions to ask. You are getting the guidance you need to find the most affordable access to healthcare for your employees and fund it in a responsible way in essence.
Self-insurance is a great option, but it is not for everybody. Fully insured can be a great option. High-deductible health plans could be a great solution if they are structured properly. At the end of the day, we are talking about trillions of dollars that are spent on healthcare and a lot of upset people. If you have an employee who feels like you have been irresponsible like on a pension plan that has excessive fees, and you haven’t looked at it in the last three years, you better do your due diligence because there is a good chance that you are going to be audited, and potentially significantly fined. That was a great segue. Tell me about Asserta Health.
Asserta Health is based on this background and payment. It is focused on enabling a different payment model for healthcare. What we aim to do is facilitate a retail-like purchasing model where price points are understood in advance, and providers are paid as they deliver services. We have a fundamental hypothesis that went into our founding, which is unless we pay for healthcare differently, it will never be affordable. You have to pay for this service differently to bring the cost down.Asserta Health is focused on enabling a different payment model for healthcare. They aim to facilitate a retail-like purchasing model where price points are understood in advance, and providers are paid as they deliver services. Click To Tweet
What Asserta Health enables is an immediate cash payment for healthcare. We have a proprietary payment platform called medEcash that allows us to stage money from employers and plan members, and pay providers as they deliver services. It creates a much more direct path for the administration of healthcare. It is even hard to say, “Third-party claims-based reimbursement.” Nothing should be that complicated. It is just pay-for-care. Understand what you are paying and pay for it when you deliver it. Providers should be taken out of the billing business. They should receive payment when they deliver services. That is what we enable.
Also, even before they deliver services potentially. I will give some examples of what we have seen price-wise. Thirty years ago, when managed care started entering the market and put all the indemnity plans out of business, the pricing structure of healthcare was still standardized. There was a price. Doctors and hospitals had a price for things. Networks and all these discounts didn’t exist.
When you think about that, it was simple. You were getting a true discount. If the insurance carrier was getting a 25%, 40%, to 50% discount, that was a true discount because the healthcare systems hadn’t had a chance yet to fight back. They realized that they were getting beat up. They are losing money. Revenue was down. They needed the health insurance marketplace quickly and swiftly turn into managed care. If they wanted patients, they had to be part of these networks.
There were a few exceptions to that. Few hospitals could survive without getting payments, and people with the popular network in that area because a lot of them were local back in the day. You didn’t have these seamless national networks you have now with Aetna, Cigna, and Empire. They were building them out, but they were local. The hospitals got together because these were the biggest entities within the healthcare systems.
Mostly independent may say, “We are getting beat up over the head. We are going to have to come together and merge horizontally with other hospitals in order to have the leverage to get higher reimbursement.” Either a lower discount or the ability to inflate the price, this is what happens. The prices started becoming much more complex. If you wanted $2,000 for a service and the insurance company was getting a 50% discount, you have to charge $4,000 for it. Maybe the other insurance company is only getting a 30% discount, so you could charge less.
That is where this whole pricing model got ridiculously complex because it is not the actual price and cost. It is the net price and the discount. How much do we want to get? How much are we willing to pay or overpay for this? That is where the pricing model of healthcare got out of whack and complex. If you go on any health insurance carrier’s website now and you go to do a doctor search, there are as many as 40 to 50 different network names. I’m not going to mention any insurance carriers, but there are some that are like, “There are 50 different choices of networks. Which is my network? I don’t even know which one.” Even within one carrier, there could be thousands of different pricing models. It is pretty insane.
Also, the healthcare system then started merging vertically. They realized, “This is going well for us. What if we took over the labs, radiologists, urgent care, and specialists, and got them all under one umbrella? We could even negotiate better prices from the insurance companies.” I guess monopolies aren’t illegal anymore because when I was young and going to St. John’s, monopoly was a big deal. It doesn’t seem like that applies to healthcare. They have allowed this to go on, which is why it becomes more complex to unwrap these huge prices. You develop a cash-pay model. Why does that benefit the doctor? Why would a provider say, “Yes, I will take that?”
It is beneficial because the administrative cost of the third-party claims-based reimbursement system is exceptionally high. Many folks say it is 25%. We got north of a $4 trillion system. We are spending 25% on administration. How can that make any sense? A doctor’s office resents insurance companies for the most part. They are frustrated with the process. In our model, you just get paid.
They get paid, which is good. I’m assuming, no balance billing in many cases. It is a cash price.
It is mutually agreed upon payment.
It benefits the patient as well. You are eliminating or lowering the patient’s responsibility in this case.
It depends on the client. We have a number of employer-sponsored health plans that are using our model. They have eliminated all premium contributions and all out-of-pocket costs. The plan is performing better than it used to. If you do things in a responsible and thoughtful purchasing manner, you can get a much better value.If you do things in a responsible and thoughtful purchasing manner, you can get a much better value. Click To Tweet
It is funny that healthcare has become one of the largest expenses on an employer’s P&L. They would never think about managing their sourcing of raw materials if they were a manufacturer or other inputs to their business and the way they do healthcare. They consider that to be a core function of their business. They actively and strategically manage it. All too often, they will go to their consultant and say, “What should I do?” We need more thoughtful engagement by an employer about what is the best way to deploy these resources and get better value for our money.
It is intentionally complex. If I am an HR director out there, and I’m hearing about this for the first time, it could be intimidating. Businesses give up after 25 to 30 years of perpetual pay more – get less. There is nothing you can do about it with all of the false narratives like, “The claims are the claims.” Because of the gag orders and the deliberate process of not giving the data to the consumer, they were able to perpetrate all of these narratives which is, “There is nothing you can do about it.” The cost of healthcare goes up 10% every year. They invented this medical trend, and it beats people up.
I have had CEOs tell me that because I have challenged them. I don’t like doing that, but it is my job to say, “This is a top 2 or 3 business expense for most medium size to large companies.” It is a tremendous tool in their recruiting process. I remind people all the time. Before the Affordable Care Act, there was no mandate. You didn’t have to do this. You didn’t have to offer health insurance. A lot of people thought you did, but it was a normal business practice.
They have this huge red on their financial statements. They don’t think there is anything that they can do about it. Every single partner that they have is involved in the process. Their benefits partners make more money when your price goes up. Your broker makes more money. If there is a general agent, the general agent makes more. The healthcare system and the insurance system make more. There is no one who wants the cost to go down 25%.
It is all about incentives and how people respond to them. I don’t want to badmouth any party here, but I would like to talk about brokers first. I want to distinguish brokers from benefits consultants. That is a distinction in my mind. One tends to be more like, “I’m a fee-based consultant. My client pays me for my services. My only incentive is to provide them with good services so they continue to pay me my fee.” A broker is generally commission-based. You got to be thoughtful about this. It is great that you don’t have to pay your broker for the services, but if you are not paying them, who is? Who is that broker loyal to?
I will have this discussion and they will say, “Don’t badmouth us brokers. We are not a significant percentage of the total cost of the industry.” I will grant them that. They are not the whole reason why costs are going up. I need to be a little cautious here, but many brokers have sold out their clients for that small amount of money. In terms of the grand total paid for healthcare, they sold out their clients because they are not helping their clients make decisions that are in their best interest. They are driven by their commissions.
Most brokers are outsourced sales representatives for the carrier. As an employer, you need to understand that. Their primary concern is safeguarding your interest. You are not paying them. The carrier is paying them. They are looking after their carrier interest because that is who is funding their business.
I was a general agent for 25 years. From ‘92 until the end of 2016, I was the broker’s broker. I worked with hundreds if not thousands of brokers over the years. Most of them did other things. They were investment specialists, life insurance brokers, disability brokers, and property casualty brokers. They had clients, and the clients were buying insurance from them. That is the thing.
Most brokers are selling an insurance product. Even though it is complex, it is simple. It is a number or a premium. It is the simplicity of that fully insured product that you are buying from your insurance broker that is relatively standardized. The terminology from one company to another is you got copays, co-insurance, deductibles, and out-of-pocket costs.
Here is the network. The network is king. That is what they decided. The network is the most important thing. We will even pay a little bit more for a larger network, which may help the insurance carriers grow networks. The brokers are selling a product at least in the small group. Maybe under 500 segments of the population.
There are large consulting firms, and I’m not saying anything good or bad about them, but in the small group marketplace, you have a broker who is selling you a product that you are asking for. They are selling to the expectations of their customer. The customer does not have much information to go by because they have been sold a narrative that is untrue. They have been sold that insurance protects me from the cost of healthcare for my employees and I’m getting the best prices.
Carrier A also owns or is owned by the pharmacy benefit middleman or the broker for prescriptions, or is also becoming the healthcare system. There is no reason why they can’t get the best prices. The numbers do not lie. What most employers aren’t aware of these days is that there is an abundance of data. You are just not seeing it. The insurance carriers always had the data. The data is what tells them what to do, how to maximize their profits, and the type of products to build. The healthcare system sees the data. There are signs that both of those entities are the biggest lobbying groups and the biggest revenue-generating economies within our economy. Healthcare and health insurance are the two largest industries in the entire US economy.
It is bigger than most other countries’ economies.
We have these two huge forces that have had the benefit of being able to keep the consumer in the dark. We have legislation, price transparency, benefit, compensation, and disclosures, all mandated on the employer. What we are now going through, and the deadline has passed, was every employer in the country technically is responsible for submitting their pharmacy data from the last two years that they have never seen or even have access to.
All the insurance carriers are jumping in voluntarily and saying, “We will take care of that for you. We don’t want you to see this data. This is the last thing we want you to see.” We have all of our consumers and customers that are fully insured that are authorizing the insurance carriers to submit the data for them, which is unfortunate. We want the data. We want to be able to show them the prices.
The cost of an MRI here on Long Island and for the hospital to perform the MRI is about $200 or less. It is self-reported, which they have to do for Medicare. What does it cost them to perform it? That is the technician, electricity, and the room in the building, and their little square footprint or whatever. That is about $200. The worst or the highest disgusting price I have seen is $7,000. The insurance carriers will pay about half that. They are paying $3,500 with the employer’s money for an MRI that costs $200 that you could get a mile away at an independent facility for $600 to $800.
If you pay cash, you could get it for less because cash is still king. When you are getting cash, you don’t have to worry about billing that person. Maybe there still is a $100 out-of-pocket cost, but it is going to be significantly less for the member if you are billing the plan appropriately and the overhead to the doctor. Seventy percent of all bankruptcies are medical debt related. That means those doctors are never collecting that money, but they are paying a ridiculous amount of admin costs to try to collect it. The future of healthcare will be cash.
That is what we are advocating for. It’s the world I would like to live in. I need to acknowledge we are a long way away from it still, but I would love to live in a world where providers like every other business in the country, advertise their prices. They say, “Here is our price point.” They also share information about their quality.
One other dynamic here in healthcare is that providers are not competing on price, they intentionally hide quality information. They would much rather that you focus on their brand. They want to be able to market and say, “We are the best health system. Come to us for everything.” The reality is that every health system is good at some things and not so good at others. Until health systems compete on price, they will not also compete on quality. The two will go hand in hand.Healthcare providers are not competing on price; they intentionally hide quality information. Click To Tweet
The world that we would like to see is one where providers are paid promptly and fully. The administrative side of their business is greatly simplified, but they are competing for business the way that every other business has to compete. They have to provide a high-value service, which means they have to deliver good quality at a reasonable price.
One of my season one guests was Dr. Jonathan Kaplan. If you are not connected to him, I will connect you too. You said what he is trying to build. He is a plastic surgeon. As most people know, a lot of that is elective surgery. It is not covered by insurance. He built a system called BuildMyHealth, which is a platform where doctors can use his technology and advertise the prices for their care. They bid on care.
I use the analogy of Amazon. It didn’t exist that long ago. There was a time before Amazon when people had a difficult time shopping. The white truck is driving around my neighborhood from dust to dawn every day delivering products from a vendor. Good or bad, I’m not here to talk about that. That makes it easy to shop. You can see and compare the price. You know when it is going to get there. You can see the reviews and similar prices.
That is why healthcare, especially high-quality healthcare, is a little bit more important than your next pair of jeans. I ask people all the time, “If a sudden illness or injury happened to your loved one, where would you go for care?” People care more about their loved ones than themselves most of the time. First of all, would you want to find the best doctor? Everybody is going to say, “Any doctor is fine. I need a transplant now.”
How are you going to find that? How do you know that the doctor whose table you are going to be on is the best doctor for you in that instance? We could be talking about life or death. When you talk about it like that, it is scary. Hopefully, most people won’t be in that situation but you could be, very suddenly. You deserve to know. It is not right for the healthcare systems and the health insurers to keep that from us. They know who the best doctors are. The data does not lie. It is not the doctor that does the most procedures necessarily. It is the doctor who does the adequate number. They have the experience to have the best outcomes.
Their patients recover the best. They don’t need opioids for the pain unless that is something that’s going to come with it. There are exceptions. The doctors are as important as the hospital you are in. There are hospitals that have great reputations, but inside that hospitals, there are good and bad doctors. You want the best doctor at the best hospital ideally. In the worst-case scenario, you want the best doctor at an adequate hospital.
If you would have to choose, I would choose a high-quality surgeon in an average hospital any day over a theoretically high-quality facility and an average surgeon. Ideally, you want to put the two together. The dynamic that exists now exists intentionally. Those health systems are aware in most instances who their good docs are and who their bad docs are. They are not about to tell you. People forget this. By definition, half of the doctors are below average. Think about that for a second. Do you have any idea which half are below average? That is what everybody should be clear of. That is deliberately opaque today.Health systems are aware in most instances who their good docs are and who their bad docs are. But remember that they won’t tell you that. Click To Tweet
It is like any industry. The best salesman might be the one with the most honest salesman. I would want an honest salesman, but the best salesman in the organization he works for might be the guy who brings in the most revenue in most cases. It doesn’t mean they are the best salesman. Maybe they have the lowest threshold for line a bit.
Healthcare is different than anything else that we shop for as consumers. It is despicable that the regulations imposed on retailers significant penalties for not posting accurate prices on the shelves right under their product. It can’t even be offline for a little bit. If Campbell Soup is in the wrong spot, you could get a $10,000 fine for that. It does not happen often but why not healthcare? The force is at work. The lobbying and the money are at work but the consumer still is king. We were talking about quality. Getting back to Asserta, when you guys are reaching out to providers, I’m going to assume that the quality of the doctor is also as critical as getting the best cash price.
We are sending quality matters. The reason why I say that is for many of our clients, their employees and plan members present to us saying, “I want to see this doctor.” When they tell us that, we don’t try and convince them to go somewhere else. We tried that earlier in our history and it didn’t go well. Choosing a doctor is an emotional decision. Arguing with someone about the quality of the physician they have selected is generally not a good use of time and resources.Arguing with someone about the quality of the physician they have selected is generally not a good use of time and resources. Click To Tweet
When people are looking for us to steer to care, we look at outcomes. That is our primary driver. We steer to outcomes. What we do as a matter of practice is combine high quality with affordability. You need both. You don’t want just one or the other. There are a number of vendors out there that say, “It is all about quality. If you get the highest quality, costs will come into line.” It is patently false. It is not true. In any equivalent situation, quality tends to cost less than a lack of quality. Going to the highest quality without any consideration for the price is not a good strategy.
Why should it be? In any other type of product, you pay for what you get in some cases. Sometimes it is undeserved. You want to get the best price, but you want to get to the best doctor. For me, that is at the core of it. That is important because when we are developing our approach to our customer’s plans, there are a lot of different pieces that are crucial that they connect and work seamlessly.
A lot of times, plan sponsors don’t realize this. Your card might say Aetna, United or Cigna, or Blue Cross. There are dozens of companies behind the scenes. A lot of them are under the same umbrella ownership of the carrier, but dozens of other outsourced vendors and third parties. We are doing the same thing. We are just trying to pick the best-in-class solutions that have aligned incentives with the consumer.
We have case management and concierge healthcare. That is the part where a pre-certification comes in for an MRI, surgery, a specialty medication, an injectable medication, and things of that nature. That is the time for our partner to say, “We want to make sure we have a plan that is designed so that we can reach out to that member immediately. We are here. We got your back. Would you like us to refer you to a high-quality provider? Would you like some guidance on that?” Sometimes they‘re like, “My doctor wants us to go here.” We are like, “That’s fine.”
We are not in the business of telling them, “No.” We are in the business of sharing, “Let’s take a look at them. That doctor is great. That doctor is in the 70th percentile or 40th percentile. Out of curiosity, would you want to know who the best doctor in the area is for that?” When you take that approach, most people aren’t going to say, “No, I’m okay with my ten-year-old son going to a good doctor.”
You pique their curiosity, but you have to understand that people don’t think this exists. People don’t think there is anybody to help them. They have been going it alone for so long, blindly following the system, and getting these outlandish bills. They think that is what it is. They don’t know there are companies like Asserta, Engaged Health, or independent pharmacy benefit managers that are 100th the size of the biggest players in the industry that get better prices because they can. They don’t know there is someone who got their back.
We also had a member call an HR director because of outreach. The nurse practitioner or the concierge advocate will usually reach out to the HR director or us and say, “Could you give John Doe a heads up that we are reaching out?” We know that this isn’t normal. They are not used to getting a call from their insurance partner. It happens months later a lot of times.
We want to make sure they understand that this is an added value to their plans. We want to reach out to them. We are not looking to change any minds, but we are looking to educate, be an advocate for them, and make sure they have all of the information they need to make an informed decision that is in their best interest of themselves, both financially and from a health standpoint.
The employer can’t dispute that either because the employer wants their employee back, even if it is not an employee going for some treatment. If it is one of my loved ones, I might still be at work, but my mind is somewhere else. My mind is not there. I want the best chance of success, a speedy recovery, the least amount of care after the fact that it is possible, and no infection. I heard stories. We could talk about that forever. From the time that you started this company, have you seen in the last few years that escalation in doctors, especially those who are interested to learn more about your model?
The marketplace is changing. Doctors are vitally important to the system. Costs are not driven by doctors. They are driven by hospitals and facilities.
I want to talk about that before you finish your thought. We are not talking about every single procedure or claim.
We will be in the future. We are taking it in that direction. The logical place for an employer to start is with high-cost services. What people don’t understand is that the regulatory environment has changed, specifically the Consolidated Appropriations Act. There are no surprises provisions related to that have strengthened the position for cash payment.
Any employer health plan can do this, irrespective of the carrier they are with, as long as they are self-funded and they are fully insured. Any self-funded health plan can implement a cash payment program alongside their current plan with minimal risk, lots of upsides, and an opportunity to begin changing the way that you pay for healthcare.
Most employers are not going to be prepared to go wholesale. They were like, “I have been using my PPO network. That is what my people are accustomed to. We are going to just go cold turkey over to a cash-pay world.” Some are doing that, but most are going to want to dip their toe in the water. People need to understand that in the current regulatory environment, you have a right to do that. There are lots of protections for the patient, your employee, or their dependents because of the current regulations.
When we spoke previously, you mentioned this to me. Maybe you can elaborate on it, but just because you have coverage with a network on your ID card doesn’t mean you have to use it.
You have a right to privacy. The Department of Health and Human Services has published guidelines around this. Each individual has the right to choose whether or not to report their insurance. What is funny is a lot of hospitals will say, “If you have your insurance and you don’t use it, you are breaking the law.” That is patently false. That is untrue. The law is the opposite, which is you have a right to privacy. You can choose whether you want to use your insurance or pay cash.
What our technology facilitates is an individual paying cash but using their employer’s money. Everybody is better off. You are not reporting your insurance. Your employer is paying your healthcare for your healthcare anyway. Why not pay more directly and efficiently, and get a better price for the same service?
When you say you have a right, when does that right end? I’m going to have a procedure. It is something that Asserta Health has the ability to intervene on. When I leave there, is it something that has to happen? Can I get my EOB a few weeks later and say, “I don’t want to pay that.”
To do what we are describing, you have to be able to pay at the time of service.
I’m talking about the legal right for that patient to pay using a cash price that expires after the service and you leave.
At least the clarity around it expires. There are some cutting-edge vendors out there that are claiming that employers can utilize a cash price after the fact, but it is messy and disruptive. It is crystal clear in law. Everybody understands how it works if you pay at the time of service.
I tell people this all the time. They get a surprise bill. They are on the wrong plan. They made the wrong decision. The best that their employer could offer was a high-deductible health plan. They say, “Can this be right?’ I’m like, “It can be right.” I can still tell them, “Call the doctor and say, ‘I can’t pay this. Would you accept if I sent you a check to make this go away?’”
That is like paying cash. It is a vulnerable situation. You don’t have any right. The doctor does not have to accept that. You already signed a document in the office that says, “You can bill my insurance and I will pay.” That is why technology is important. You want to be able to take this and make it user-friendly. Are all of the services you are getting involved with services require pre-certification so that there is that trigger?
Not all, but many.
What is an example of one that could work without pre-certification?
Pre-certification depends on the plan. We have clients that require pre-certification for all outpatient surgeries, and we have others that don’t. It can work in either environment.
The trick is knowing it happens beforehand. There has got to be something there.
There are incentives and enhanced primary care. There are a number of strategies that can help facilitate identifying cases for service.
I can’t believe this has been the quickest show in my mind. It is already up on the hour. This has been great. Hopefully, this is helpful to employers, plan sponsors, and HR directors out there. It is another layer of that onion that when we peel it back, it is like, “There is an entire universe out there outside the status quo.”
It motivates me to keep learning. I’m happy that we connected. The days of managed care networks are coming to an end. They have been exposed for their lack of value, especially over the last 15 to 20 years. I don’t necessarily want to see the companies go out of business, but I want to see them do business differently. That is only going to happen if the consumer takes their business elsewhere. They will follow money like anything else in life. You have been amazing. How could someone contact you? Is LinkedIn the best way?
I appreciate it. Thanks for taking the time out of your day to join me. I will be talking to you soon.
Take care. Thank you very much.
About Korb Matosich
Korb has an unusual depth of experience managing all sides of health care payment. He oversaw both Revenue Cycle Management and Payment Integrity businesses at Ingenix, now Optum, at UnitedHealth Group. He also served as the CEO of AAPC, an organization that certifies billers and coders.