By Nick van Terheyden aka Dr Nick, Principal, ECG Management Consulting
Twitter: @drnic1
Host of Healthcare Upside Down – #HCupsidedown
Remember when taxis were the most common form of on-demand transportation? Unless you’re a taxi driver, you probably don’t remember that time very fondly.
Getting from point A to point B via taxi came with its share of frustrations—long wait times, the need to make yourself conspicuous so a driver would see you hailing them, and of course the fear that the fare might exceed the cash in your wallet. And that meter always seemed to have a mind of its own, ticking inexorably forward, sometimes with alarming speed.
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It’s a far cry from what so many of us experience today when we need a ride—pull out your smartphone, open the Uber app, find out how much the ride will cost, and then summon a driver.
But what you might not remember (or realize) is that when Uber first arrived on the scene, it had the same open-ended pricing as the taxi model. Using Uber solved the friction of ordering a ride, but its price-per-mile policy did little to alleviate cost uncertainty.
The real game changer happened when Uber made the leap to fixed pricing. Now you know up front how much the ride will cost, even if you end up stuck in traffic. As with so many goods and services you purchase, you know the price of an Uber ride before you agree to buy it—and the process of paying could hardly be easier.
Not so in healthcare. Despite price transparency regulations that are in effect, patients continue to be shocked and frustrated by unexpected bills that crush many into medical debt. Other industries have solved for this. Why can’t we have the same experience in healthcare?
Dr. Florian Otto is the co-founder and CEO of Cedar, which offers a platform that combines payer data with provider workflows to create a personalized, end-to-end consumer journey. On this episode he shares the personal story that inspired him to find a way to make healthcare more affordable and less complicated. Below are a few excerpts.
Inspiration for a consumer-friendly healthcare platform.
“Back in 2015, my wife fainted on the street in New York and got admitted to the emergency room. The physician staff was absolutely amazing. But while she was lying there—and we were, of course, still very disturbed and nervous—the billing staff came and charged us the copayment. Then a month later, we got the first invoice from the hospital—and everything was in CPT and DRG codes, which we couldn’t understand. It was [difficult] to pay because she had to log into the portal, set up an account, and then pay the bill. One month later came the next bill, which was from the imaging center. It was just slip of paper where she could fill in her credit card information and then mail it back. Then half a year later, a debt collector called her for a bill that she never received from the lab company. And then the interesting piece happened—she told me ‘Florian, never take me back to that hospital. If the billing is so messed up, I’ve lost trust in the entire healthcare system.’ That really resonated with me.”
Demand for a personalized healthcare experience.
“Your best experience anywhere becomes your expectation everywhere. When the consumer is hailing the Uber, Uber knows where you want to go before you open the app. When you open your Amazon account, the recommendations that you get are different from mine, because we have different preferences. We feel personalized by this app. How convenient is it, with one click, to buy something? We [at Cedar] strongly believe that healthcare should be exactly the same. So we started the company in order to [make] the billing experience very transparent, very easy, very mobile, very personalized. Everybody gets a different bill at a different time through different channels with different follow-ups based on their individual preferences, so the patients can really focus on getting healthy again and not worry about the administrative experience.”
The value of pricing transparency.
“Healthcare systems acknowledge that if they are not transparent with their pricing, patients won’t come to them at some point. Look what happened with Uber. In the beginning, every time you got in the Uber, you got nervous, because you had no idea how much they would charge you. Then they switched to a fixed price, and what happened to their business? It went completely through the roof. Customer satisfaction went through the roof. Why is that? Because all of a sudden, you’re selling peace of mind. And that will happen in healthcare as well.”
This article was originally published on the ECG Management Consulting blog and is republished here with permission.
About the Show
The US spends more on healthcare per capita than any other country on the planet. So why don’t we have superior outcomes? Why haven’t the principles of capitalism prevailed? And why do American consumers have so much trouble accessing and paying for healthcare? Dive into these and other issues on Healthcare Upside/Down with ECG principal Dr. Nick van Terheyden and guest panelists as they discuss the upsides and downsides of healthcare in the US, and how to make the system work for everyone.
Tune in weekdays at 9am, 5pm, and 1am ET.
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