Healthcare Payers: To Pay Or Not To Pay

The gimlet-eyed woman sitting next to me on the flight looked like she probably knew ten ways to kill me using sesame seeds. She had precisely aligned, glimmering white teeth that indicated either magnificent genetic breeding or a wonderfully talented family dentist.

She asked. “What makes consultants different from the rest of the world?” I winked at her and said, “My one great accomplishment is that I once got elected treasurer of my third-grade class.  Unfortunately, my triumph was short-lived, since the election got overturned by the principal as soon as he learned I had a D in recess.  I don’t mention the second part to too many people. I just let them keep thinking that I served out my term with honor and distinction.”

Consultants, I told her, are the people in the movie theaters rooting for the iceberg instead of the Titanic.  “It helps if you know how to make rocks cry and can teach a dog to meow,” I said.  She gave me a look that seemed to indicate that if it were up to her, she’d save a special place for me in the guillotine line when the revolution went down.

In addition to all of our presumed flaws, some consultants are sycophantic enough to suck the bark off of a tree. Consulting even lets in a few Republicans now. Not in great numbers, certainly, but the odd token here and there.

Junior consultants can be a little paranoid.  The problem with paranoia is that it sneaks up on you. You start by wondering why the guy next door didn’t invite you to his barbecue.  Then you’re convinced the whole neighborhood’s in on the conspiracy.  Then you’re passing out literature about the Trilateral Commission.  Then before you know it, that same neighbor is telling a CNN reporter that there’s a guy on a rooftop with a high-powered rifle.

Some people dream of having Bill Gates’s money, not just his looks.  Consulting firms dream of making that kind of money.  A lot of them make money working with payers.  Big money.

One way they make all of that money is by helping providers save money.  The way they do that is by helping payers not pay a nickel more that they are obligated to pay their members.  Members like you and me.

It is easy to sell consulting if what you are offering is a way to save your clients money.  For payers, claims show up on their balance sheets as liabilities, the same way deposits show up as liabilities for banks.  If you are a payer, anything you can do to minimize your liabilities sounds like it ought to be a good thing.  Pay less, earn more.

It’s simple math, unless of course paying less causes members to leave, then the simple math gets very expensive.  The value of payers, like many other services firms, can be calculated based on the average value of its members times the number of its members plus free cash flow.

Reduce the number of members, and the cash flow (premiums) contributed by those members and their value decreases.

What if instead of a strategy that minimized payments of claims, payers decided to maximize them?  That would yield more members and more members paying their premiums.

It’s a simple strategy and a strategy not used by any of the firms.

Healthcare: If Everything Else Fails, Eat A Slim-Jim

I don’t play well in public.

Contrary to what you may believe, I do not have special powers of perception. Like you, I’m just a customer and a patient. However, I have a very short fuse when it comes to confronting stupidity.

Most people walk into a store, do what they need to do, and leave. I walk into a store and the consultant in me wants to start fixing things. I want to speak to the manager and ask him or her why they do some of the things they do.

Why have fifteen cash registers at Wegmans and only have three cashiers? Why does TSA have different security procedures at every airport?

I bought gas today. I parked my car between two pumping stations that were set ten feet apart. A built-in receptacle for depositing lit cigarettes stood a few feet from me. A structural metal pole stood midway between the two pumps. Attached to the pole was a metal box. Inside the box was a fire extinguisher. The box required a key in order to get to the fire extinguisher. (Do you see where this is headed?)

I’ve never worked at a gas station, nor have I been a fireman. Nonetheless, the stupidity wheels in my head started screaming at me. In an effort to temper myself, I looked around the complex and thought, if a fire was to break out, where would it happen? After a millisecond of thinking, I was able to eliminate all of the other places except for where I was standing. The minimart seemed pretty fireproof. The place where people pumped air into their tires looked like there was nothing to cause a conflagration.

And then it hit me. I was standing at ground zero. A very large tank below the ground held thousands of gallons of gasoline. That tank was connected to hoses whose only purpose is to move gasoline from the tank and out of those hoses as quickly as possible. Gasoline burns. Then bad things happen.

So, what would happen if there were a fire at one of the two gas pumps? There would be flames. Big flames. And it would be the job of Mr. Minimart, let’s call him Skippy, to put out the fire. Skippy, seated behind the minimart’s counter, would put down his copy of his Cliff Notes magazine, How to be an International Diplomat, and he would say to himself, I must do something. I should get the fire extinguisher and put out the fire.

And if Skippy is not a mouth breather—one of the fish NPR claims walked from the ocean, Skippy would remember that he locked fire extinguisher in the box—say it with me—that is located smack dab in the middle of the inferno. Skippy is out of options. From the minimart, Skippy calls the fire department and starts eating a Slim-Jim.

Stupid ideas have consequences. Every business is chocked full of stupid ideas that yield dumb processes that were made by people who never considered the consequences of their ideas.

Healthcare is not immune to dumb ideas.

“People call us. So, let’s build a big room and buy a bunch of phones so we can talk to them. If too many people have to be placed on hold, tell our people to talk less, and then they can talk to more people. And let’s buy some philodendrons and place them in the big room.”

“Should we give our people free coffee?” Asked the assistant vice president.

“I just gave them plants,” she replied. “Come to think of it, get them plastic plants. That way we can market ourselves as ‘going green’, by not having to water them.”

Dumb ideas.

Many health systems and payers have executives whose singular responsibility is to drive innovation. The results of the recent election should have a lot of healthcare executives wishing that they had written their strategic plan on an Etch-A-Sketch. Make healthcare great again is going to change the dogma of every aspect of healthcare. It is certainly going to shake up the Veterans Administration.

To be effective, the chief innovation officer should set aside a day and talk to patients and caregivers and family members of patients and referring physicians and prospective patients and ask them two questions:

  • What can we do to help people manage their health
  • What can we do to help people do business with us

And then he or she should go back to his or her office—I used both pronouns to try to be politically correct—and that person should rethink the definition of innovation. It is not about providing valet parking. It does not include serving Starbucks in the hospital’s fifty million dollar lobby. And innovation does not include free Internet.

What it requires is upping your game. It requires letting people do what they want, every time they want to do it, whenever they want to do it and using whatever device they want to use. And the vast majority of them want to do it without having to call you.

If that makes you uncomfortable, grab a Slim-Jim, and watch what your competitors are doing.

Healthcare: All And All It’s Just Another Brick In The Wall

It occurred to me while evaluating the contributions a select group of savants gave us over the last few hundred years, that the number of savants, at least in specific areas, has hit the innovation and transformative wall.

Classical music had Beethoven, Mozart, and Tchaikovsky. Art had Rembrandt, Picasso, and Van Gogh.

Rock and roll had the Rolling Stones, the Beatles, Led Zeppelin. Some would argue (include me in that group), that music post-1974 hit Another Brick In The Wall—Pink Floyd (I was the first kid on my block to buy everything and anything released by Pink Floyd, Genesis, and Queen). Those of you in the skinny jeans crowd may have to Google those bands.

So, back to the premise that Cream rises to the top (White Room–, and since then nobody has delivered anything that surpasses what happened many years ago. We are mired in the brilliance of what was.

Nobody’s playlist includes a classical piece of music composed in the last one hundred years. With the exclusion of Andrew Wyeth, nobody can name a painter whose paintings sell for millions of dollars.

Innovation hit a wall. And since no one is light years ahead of being mediocre, mediocrity looks pretty good to your board of directors. In business, The Pursuit of Excellence has a new standard bearer—In pursuit of mediocrity. We are no worse than every other firm. Define low expectations, and meet them. And then move on to your next challenge. Mediocrity is okay as long as all of the other firms are mediocre. You may be looking up at the bottom, but if all of the other firms are equally poor, being no worse than them is not a disadvantage.

Unless you consider your customers. Your patients. In healthcare, the people whose care your firm is supposed to be managing are looking for the next Mozart while your board is humming the latest hit from Lady Gaga.

Innovation and transformation are not defined as kicking it up a notch; going from mediocre to mediocre plus one. Giving the people in your call centers a cutting edge Bluetooth headset and adding skylights and free coffee is not innovative. Changing the font of your website and changing its color scheme to cerulean blue does not help you acquire patients or retain them. It does not improve care.

Lipstick on a pig.

But if you could get the pig to provide a remarkable experience for every person, every time, at any time, and on any device, you may have something.

Until then, download a copy of Pink Floyd’s Dark Side of The Moon, buy a poster of Van Gogh’s Sunflowers, and hope the stars align with your firm’s business strategy. If that doesn’t work, buy your favorite shade of lipstick, find a pig, cross your fingers, and hope for the best.

What Are Healthcare’s 5 Most Overlooked Things?

I lied to you. I read that more people will read your blog if you title it with ‘best’, ‘most important’, or ‘Top Five Something or Another.’ Sue me.

[Sidebar: A hospital executive and her family are at TGIF for dinner. While waiting for her order, the hospital executive grabs a purple crayon (it’s purple because I like purple), and starts killing time by reading the brainteasers printed on her placemat to her family.

“A plane crashes on the border of the US and Canada. In which country are the survivors buried?” Her son says, “I thought Canada is a state”.

“Question 2: ‘Point to the nearest patient in the room.’” She scans the room. She observes that none of these people are wearing a hospital gown. She is stumped. “Where are my nachos?” She asked]

Writing is the ultimate way for me talk to myself, and it calms the nascent voices vying for my attention. That is because when I talk to myself I know I am talking to an intelligent person. Maybe I should not require people with whom I am meeting with to play the music from ‘Goldfinger’ or ‘Ride of the Valkyries’ before I enter a room.

(I know some of you want to send me to a re-education camp to atone for my sins.)

The military has an expression I like; the diversion you are ignoring is actually the main attack. Sometimes things exist that, although they seem unconnected, are actually part of a larger plan. Not your plan, to be sure, but a plan nonetheless.

We’ve all been in planning meetings to suss out what we should be doing. There is innuendo and double-talk, evasive phrasing and arcane code words. You leave the meeting believing your task is to report back on what consumers really want, when what they really wanted you to do is find out what the hospital cafeteria’s soup of the day will be next Tuesday.

To most of us, the concept of e-commerce means nothing more than buying something over the Internet. It doesn’t work with healthcare, but it should. “Click here for our two-for-one holiday deal on knee replacements.”

E-commerce begat mobile commerce; shopping using a device other than a PC or laptop. However, mobile commerce is nothing more than reproducing desktop commerce, which is e-commerce.

Under either solution, consumers are forced to fill out forms to verify their identity, search inventory, and add items to their shopping carts. And in many instances, to close the sale, the consumer has to leave whatever app they are using and pay for whatever they purchased from a different app—eBay and PayPal.

Conversational commerce could also be called inference commerce. It should use the capabilities of artificial intelligence through machine learning. Pushed even further, you arrive at cognitive learning and hence, cognitive healthcare. It creates personalized virtual assistants, like Nordstrom’s personal shopper, only without having to pay for the person.

I like to think of it as an Assistant-As-App (AAA), although today many of those apps are nothing more than an online IVR tricked out to connect you to a real person—online chat. A real Assistant-As-App does not require a person behind the digital wall to help you complete your task (online scheduling versus finding a doctor—one is helpful, the other is just a digital Yellow Pages.)

Take this for example. During any given day I’ll chat with colleagues online, use Messenger with friends, use LinkedIn to stay in touch about work, and text my wife and children. Conversations. Conversations using my phone and without speaking to anyone. What is missing from all of these conversations is commerce. Messaging is how people communicate, but it is not how people access and engage with a firm.

But what if it was? Why not create an AAA that was a digital interface that enabled users to accomplish complex tasks through a natural dialogue with an assistant? I deliberately left a word out of the preceding sentence. The preceding sentence is the digital IVR solution. The missing word in that sentence is the 2nd digital. The sentence should be, creating a digital interface designed to enable users to accomplish complex tasks through a natural dialogue with a digital assistant. This is the Super Smart App, the SSA.

Let’s try something on for size. Sally and her family moved to Philadelphia in August. She received an email from the Hospital of the University of Pennsylvania (HUP). HUP found Sally by mining data about people who moved to Philadelphia. The email told Sally that she could do everything she needed to do to manage her health by downloading HUP’s SSA, MyHealth.

So, Sally downloads MyHealth—not a trademark infringement of MyChart since MyHealth actually does things, and also works for non-patients. (Ten seconds of opining. Patient portals work—for patients. They do not work for family members, caregivers, and prospective patients (customers)).

Sally speaks to the app (like using Amazon’s Echo). “My name is Sally Smith. We are insured by Cigna. Does HUP accept Cigna?” “We do,” it replies.

“I want to register my family with HUP.”

MyHealth recognizes Sally from the email it sent her. “Sally, we have your address and phone number. Other than yourself, whose health do you want us to help you manage?”

Sally provides the profile information of her husband and children. MyHealth replies, “Everyone is registered. Your account is secure because we use voice recognition to identify you. Your husband may also want to add a voice signature to the account. If you want, you can tell me the name and contact information of your PCP, your husband’s and your children’s pediatrician, and I will contact them and get their Electronic Medical Records.”

Wow! Exclaimed Sally. MyHealth chuckled digitally, but Sally couldn’t hear virtual chucking. “I see you have two children, one in high school, and one in middle school. Pennsylvania requires all new students to have a physical before school starts. We have three pediatric Primary Care Practices within five miles of your home, one of which will come to your home to do the annual physical. Would you like to schedule an appointment?”

“Does it cost more to have the doctor come to our home?”

“It does, but because you are with Cigna, and new to the area, we can discount the cost by twenty-five percent, and your total cost will be three dollars.”

Sally scheduled the appointment. MyHealth replied, “If you tell me the name and contact information of your pharmacy, I can have all of your family member’s prescriptions transferred to the CVS Pharmacy two miles away from your house. Or, I can have them set up on automatic renewal through their mail-order pharmacy. For doing that, CVS will give you a twenty-dollar coupon.”

Sally tells MyHealth the prescriptions her family members are using. MyHealth replies, “If you switch to our mail-order pharmacy automatic renewal program we can save you forty percent.”

When we think of things like patient access, experience, and engagement, patients have one notion of how they should work, and providers have another.

So, that is how healthcare works in my mind. All of these capabilities can be designed today. The only thing missing is the leadership to do it.


Why Does A Customer Portal Out-Preform A Patient Portal?


These are the nameless faceless people who are queued up waiting to speak to someone in your call center.  They expect to be disappointed. They are always disappointed.  They know how the game works. “Your call will be recorded for quality purposes. They know that while the call may be recorded, the recording has nothing to do with improving the quality of their next call.

Inherently, you know that. You’ve heard the same recording when you’ve called other companies.  The call center is nothing more than a big room with a lot of phones. As soon as you hear the message, you know the message is just the precursor to a really bad customer experience.

If you are like me, you want to call their bluff. You repeatedly punch ‘0’hoping to escape from the IVR’s decision tree and speak with a mouth breather.

Half of the callers have already been to your website.  They could not get an answer to their needs, and so they decided to call you.  For most of them, this is the first time they have tried to contact you in the last three years.  Thousands of people a month who are looking for a reason to be engaged with you.Thousands of people who will be disappointed.

I have had a few recent conversations with healthcare executives who have asked the question, “Why are we even discussing adding an interactive Customer Portal since we spent millions of dollars building a patient portal?”

That is a great question.  And there is a great answer that drives home the point.  The Customer Portal, designed in a UX/UI framework, can be designed to do everything that can be done with a patient portal, and dozens of things the patient portal will never be able to do.  Plus, and it is a very big plus, the Customer Portal will serve all of a health system’s stakeholders, not just those individuals whose data happens to be in the EMR.  A consumer Portal will help drive population health. And it will help convert consumers to patients.

A large health system asked me to help them design an online scheduling system and tie it to their patient portal. I told them I would not help them because doing what they asked would exclude most of the people who needed to schedule an appointment; family members, caregivers, and prospective patients.

People–all of your stakeholders–need to be able to do what they want, every time they want, and on whatever device they want.

Each of the features listed under the Customer Portal column can be designed and built today.  Please let me know what you think, and what additional features you would add.


What Is Healthcare’s Missing Link?

All things being equal. We use the phrase a lot. It occurred to me that the only reason to use the phrase is that more often than not, all things are not equal.

In healthcare, experiences never equal expectations. The last best experience that anyone has anywhere becomes the minimum expectation for the experience they want with their healthcare organization–I borrowed that phrase from a colleague.

If you look at which U.S. firms were market leaders ten years ago, and compare that list to today, you will find many of those firms are no longer on the list—go digital or go home. What is it that the best consumer-focused firms in the country do that others don’t? They created a value-experience that gets consumers to visit them daily.

And how did they do that; were they just lucky? The easy answer would be to say that they put much of their business online. But that cannot be the whole answer. Providers and payers are online and none of them are listed as the best firms to work with. Being online does not get their customers, or patients if you prefer, to visit them daily. Heck, many customers and patients never visit their provider or payer online. And why not? Let me toss the question back at you; why would they? Can you think of a single reason why one of your customers or patients would visit your organization online every day?

Simply being digital is not the solution. Your EMR did not create a bold, new way of healthcare; it simply digitized the old way.

The statement about inequality at the start of this piece becomes relevant in this discussion because your organization likely created the inequality. It all comes down to expectations. Fact 1: If you do not know the expectations of a customer or patient you will never meet or exceed those expectations. The user experience continues to be less than the user’s expectations of what that experience should be.

Fact 2: Nobody’s user experience on the phone with their provider or payer will exceed their expectations. That is because given the choice most people would rather interact with you online. You don’t want to call your payer or provider anymore than they do, so why make them?

Terry Orlick published “Pursuit of Excellence” decades ago. The book was an instant hit; everyone read it. And the reason everyone read it is because people were astonished to learn that simply being average was the new excellence. The rule of thumb for delivering a customer experience became, “We may not be great, but we are at least as good as they are.”

Imagine a world where every single interaction you had with your payer or provider could be done online and done while providing a remarkable user experience. Now imagine a world where the user experience was so good that your customers came to you every day—I know, that sounds absurd.

Providers who are saying, “There is no way we could get people to visit us daily, we cannot even get them to visit us once a year,” are not imagining a world. To get people to come you must give them a reason to come.

“Why would a healthy person want to visit us every day?” How about because they want to stay healthy? Try this exercise. Put your most creative people in a room and tell them not to come out of the room until they have imagined a compelling reason to get people in your community to visit your health system online every day.

Here’s a hint. I visit my phone every day, going to two different health-related applications—tracking my exercise and my diet. These applications don’t share information with each other. They do not assess my health, and they do not warn me when my health data should raise an alarm. They simply store data—just like your hundred million dollar EMR.

Other than a lack of imagination, there is no reason your health system cannot offer your customers, members of the population whose health you are supposed to be managing, a web-based super-app that creates a super experience. One that causes them to reach out to you.

What if that super-app let consumers do the following?

  • Enter a range of health-related data; exercise, diet, vital signs, track use of prescription medications
  • Share data among the apps
  • Review the data
  • Assess someone’s health based on that information
  • Warn the person if something seems amiss
  • Let them chat with you
  • Let them ask you to call them

People who are not even your patients might sign up for that. Sally did. Sally is forty-one, married, and has two children. Sally and her family just moved to your service area.

Now imagine that from that same super-app Sally could:

  • Select a primary care provider
  • Schedule an appointment online, using a mobile device, or by phone
  • Choose between an office, tele-health, and in-home visit
  • Be provided with the different prices for each appointment type
  • Be told what her out-of-pocket cost would be for the appointment
  • Receive payment confirmation
  • Be notified that her payer information was submitted
  • Update her health profile online and create profiles for her children
  • Track her health-points
  • Chat with a nurse
  • Review her labs
  • Request an authorization
  • Be notified her doctor is running 20 minutes late
  • Set up a payment plan
  • Be notified to schedule their children for school physicals
  • Have her families prescriptions refilled automatically…and so forth

That is what we have been talking about. That is a customer portal. Sally thinks you did this all for her. But you know that once Sally has entered all of her information into your health system she is no more likely to change health systems than she is to change banks.

Zero-cost patient acquisition and retention–the missing link. Imagine a world.

Healthcare: When You’re In A Hole, Quit Digging


To those of us who have children, you may have put them to bed by reading one of my favorite childhood books, Mike Mulligan And His Steam Shovel. It’s a simple read. Mike and his steam shovel compete against other more advanced shovels to dig a foundation for a new building.

“ We’re going to need a bigger shovel,” yelled the CIO to his workers who were gazing into the hole wondering how to help the patient. The foreman tossed his shovel to the patient.

“How is the shovel going to help me?” The patient asked. “Do you really think that if I dig a deeper hole I will get out?”

“I’d love to help you, but I have a meeting with EPIC.” The CIO walks away.

The unfortunate patient stares at the shovel and unwraps his Snickers bar. He wonders how long he’ll be there until help arrives.

The chief patient experience officer happens to walk by, and she spots the patient. “How can I help you?” She asks.

“Get me out of the hole,” he hollers. She tosses him her cell phone and tells him to call the call center.

The health system’s innovation officer tells him that they now offer valet parking and Starbuck’s coffee and he tosses the patient two coupons. “When you get out of the hole, use these coupons. We’ll pay for your parking and a cup of plain coffee—no cappuccino.”

The patient eats his last candy bar, wishing he had a cup of coffee. Using the chief patient experience officer’s cell phone, he calls me and tells me of his plight.

I jump into the hole.

“Why did you jump into the hole?” The patient asks me.

I tell him, “I’ve been here before, and I know the way out.”

We get out of the hole and drive to the hospital. I hand the parking attendant the chief innovation officer’s free parking coupon. We return the CIO’s shovel and the chief patient experience officer’s cell phone.

He uses the Starbucks’s coupon to get a cup of coffee. Because he’s had such a bad experience, he figures he’ll get the largest coffee, a Venti. (In Italian, the word venti means twenty; at Starbucks, it means at twenty-four-ounce cup of coffee.)

We tell the admission clerk that the patient has a 10 a.m. appointment. The clerk tells us to go to the waiting room and take seats with dozens of other patients.

I thumb through a thirty-eight-year-old copy of Life Magazine while he watches CNN.

“I feel like I’m back in the hole,” he tells me.

I look at him and say, “I’ve been here before, and unfortunately this time, I don’t know the way out.”