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Jeff Lin
Host of Payment Matters
Payment Matters is a monthly radio show focusing on real issues happening in healthcare payments. Jeff chats with industry experts and thought leaders to bring fresh perspectives on how providers, payers and consumers are all tackling the evolving healthcare payments market. Join the conversation on Twitter with #PaymentMatters.

On this very first Payment Matters episode, Jeff chats with Deirdre Ruttle, InstaMed Chief Marketing Officer about current issues in healthcare payments, including how consumers’ payment experiences in the retail industry are influencing their expectations for healthcare payments.

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Listen to the full episode now or read the full transcript below. Tune in to Payment Matters weekdays at 4:30 AM, 12:30 PM and 8:30 PM ET.

Jeff Lin: I’d like to explain what this podcast is all about. I’m excited to have an opportunity to talk about the wide range of topics affecting the healthcare payments industry, the real issues that are happening in healthcare payments today and how consumers are impacted. We will also look at the associated security risks and the political debates that influence and impact all things related to healthcare payments. We’ll have these discussions with healthcare providers, payers, consumers and even healthcare IT vendors, to hear their viewpoints on healthcare payments. I’ll be bringing on guests weekly who are leaders and innovators in this space, to get their unique perspectives on approaching the challenges and opportunities for healthcare payments.

Before we dive in, I want to take a moment to introduce myself. I have had over 20 years of experience in healthcare payments. I spent my entire career focused on this segment, thinking of unique ways to drive change and be innovative in this space. My current role is the Senior VP of Product Management at InstaMed, healthcare’s most trusted payments network. My day-to-day job involves overseeing the ongoing product innovation of InstaMed’s healthcare payments solutions for providers, payers, consumers and healthcare IT vendors.

Before I came to InstaMed, I was an executive at Accenture focused on large-scale enterprise analytics CRM implementations for Fortune 100 companies. Prior to that, my undergrad education was at UCLA, where I graduated with a degree in Microbiology and Molecular Genetics. I have a great family that includes two young kids, ages 1 and 3, and I have been experiencing firsthand the opportunities and challenges of healthcare payments. I live in southern California where I enjoy the sunshine. Today, there’s a blue sky and it’s 80 degrees in the middle of January. Finally, I am a former Eagle Scout.

So, why do healthcare payments matter? Payments matter, because at the end of the day, it’s the exchange of value. Someone paying for a medical service. This is something unique to the healthcare industry. No other industry is like healthcare payments. It’s estimated that the consumer out-of-pocket spend this year is about $400 billion and could be growing to $600 billion in a few years. That’s a significant chunk of our consumer wallet. When you look at the overall healthcare payments economy, which comprises about 18 to 20% of the overall GDP, you see this is a really big part of our lives. How do we go about addressing this? How do we go about fixing this? The nature of healthcare is connecting all the various parties together, to make sure we reduce the friction in healthcare payments.

The nature of healthcare is connecting all the various parties together, to make sure we reduce the friction in healthcare payments.

One of the interesting things about payments in general and healthcare payments in particular, is the differences and the gaps between healthcare and other industries. I’ll highlight one use case, the hotel check-in and checkout model. Think about how, when you check into a hotel, you walk up to the desk. They welcome you and they ask for ID to confirm who you are. Next, they ask for a payment method, so they can secure a payment on file. They tell you that you’ll be staying for X days, you have this type of room and your cost is going to be X dollars. They do this in such a streamlined way. You expect it. You know you’ll need to present your ID and it provides this seamless check-in experience.

Let’s compare that with the healthcare environment. When you check in, oftentimes they’ll ask for your ID and your insurance card to take photocopies. They’ll have you fill out a whole bunch of forms upfront. But never once do they say how much your cost is going to be or even your estimated cost. Or otherwise give you an understanding of payment expectations. You can see that upfront in the check-in process, there is already a gap.

Now let’s take this to the next step and talk about the checkout process. When you’re in the hotel, they set expectations upfront with you. When you go to the desk and say you want to check out of your room, they provide you a written receipt, or even an e-mail – I see that more often now – about the actual charges for the stay. It’s detailed out and itemized for you and you have full confidence about how much was charged to your credit card.

Let’s again compare that with healthcare. When you check out after your services have been rendered by your healthcare provider, you walk out and you’re out the door. At most, they will try to schedule your next appointment, but they’re not collecting anything and they’re not setting payment expectations. What happens next is that you get “surprised” by a bill. In 30 to 45 days, a bill comes in the mail and you’re supposed to pay it now. That’s a big gap and a difference between the healthcare industry and the hospitality industry, an industry that has been refining the consumer experience in terms of the check-in/checkout experience. If you take this healthcare experience and multiply it by 20% of the economy, there are real problems from a consumer experience perspective that we can really improve on.

With that being said, I want to introduce today’s guest, Deirdre Ruttle. She’s been with InstaMed for six, maybe seven years, and she’s the Chief Marketing Officer at InstaMed and Head of Healthcare Marketing for Wholesale Payments at J.P. Morgan. I’m excited to have her on today as the first guest. Before we begin, Deirdre, please do a brief introduction about yourself and your background.

Deirdre Ruttle: Sure, thanks Jeff. I’m happy to be here today. I’ve been in the healthcare payments world for about seven years. I am focused on the technology behind how we’re moving healthcare data and moving money. I’ve especially focused on the payer space for several years, working with large health plans across the country as they address some of their healthcare payment needs both in the B2B space, as well as in the C2B space.

I have also spent a lot of time digging into the data. As you know, InstaMed does an annual Trends in Healthcare Payments Report. That report is compiled from survey data from consumers, providers and payers, as well as data from the InstaMed platform. And, of course, third-party data source leaders like Accenture, Deloitte, CMS, etc., who are looking at what’s going on in the healthcare payments world. I spend a lot of time looking at those trends and seeing how technology, how business process, how anything can help improve the healthcare payments experience for all parties – consumers, providers and payers.

Before getting into the healthcare payments world, I was completely outside of healthcare, focused in the C2B, as well as B2B, ecommerce worlds in a variety of industries. Ultimately, I am able to bring a lot of that experience, those retail consumer best practices, into the lens of how I look at healthcare and ultimately how InstaMed looks at healthcare payments.

Jeff Lin: It’s interesting to hear you say the intersection between healthcare and your experiences there and the fact that your prior experience was focused on retail. The intersection there is kind of a unique background. The first question that comes to mind is, what are the main challenges in the healthcare payments industry that we have faced in the most recent years? What’s going on and where do you see that headed?

Deirdre Ruttle: The rapid increase in consumer responsibility has had many, many impacts. You certainly can point to the impact that it has on consumers’ household budgets and the amount of money that they’re spending. When we look at what’s happening with the increase in spend, it’s across the board. The headline and the talking point used to be that this is about high deductible health plans. High deductible health plans certainly play a role, but when you look at the data that shows deductibles and their growth, it’s not limited to high deductible health plans. It’s across the board. All plan types. Additionally, when you look at premiums and the cost of premiums, we see increases across the board there too.

This rapid increase is making consumers look at healthcare differently. Because, when you’re asked to spend more money on something, your expectations shift. For a long time, it’s been OK to say that healthcare is 20 years behind. That’s not OK anymore. You’re seeing that in the shifts in consumer survey data and consumer research that’s coming out across the board from many organizations that are focused on this. And it changes relationships. When you look at the relationships we have in a three-party system, that increasing consumer responsibility means providers need to collect more from patients. There are shifts that are happening in provider organizations and changing expectations that providers need to meet.

Consumers need to make more payments, and consumers are looking at that a variety of ways. They’re asking, or even demanding, to be able to make those payments in ways that are convenient to them. Payers need to collect directly from consumers for individual insurance and collect those premiums. Payers historically did very little in that area, very little in the one-to-one relationship. You see all these dynamics playing out. You see some real shifts. 

What do I think is ahead? I think that the intersection of healthcare and retail is becoming very real. As you look at major healthcare organizations, both on the payer side and the provider side, you’re seeing new job titles pop up that have the word “experience” in them. The patient experience, the member experience. You’re seeing consumer retail leaders from high-profile organizations being pulled into healthcare. I’m sure you’ve read the recent headlines about a major player who is dabbling more and more in healthcare. Again, when you ask people to spend more money, they expect more.

Jeff Lin: I look at this healthcare payment ecosystem as undergoing a major shift, a major change. I call this the inflection point, but the inflection point in healthcare timelines. These are significant dollars that have major impacts regarding what you said about the retail-ification and the consumer. At the end of the day, it’s a major shift in the entire relationship in terms of how care is delivered. And payment becomes a key part of that. From your point of view as someone who has been in other industries and has seen consumerism take shape, how would you compare healthcare payments to payments in other industries?

Deirdre Ruttle: If we want to face brutal facts and be real with one another, healthcare has a long way to go to catch up. The human experience within healthcare has been deprioritized for too long, and some of it was because it wasn’t as necessary. It wasn’t as much of a need. Historically, when providers were collecting most of their revenue through payers, they could write off patient bad debt without it having a significant impact on their organization. When payers were engaged with consumers through employer groups exclusively, they didn’t have those individual relationships and that dynamic at play.

Now, fast forward. You have this rapidly shifting healthcare payments ecosystem, and we need to catch up. We need to look at the other payment experiences that consumers have with the mindset of that’s what consumers expect in healthcare too. We can’t get away with comparing healthcare 10 years ago to healthcare now. No – we need to look at it in terms of how I can walk out of this interview and on my way to the elevator I can order my groceries, I can order a prescription refill, I can get a ride to my next location and I can check in on my household without ever talking to anyone, all from the convenience of my phone, all while I’m multitasking, doing something else. Those expectations are now present when I have a healthcare encounter. I want to understand what’s going on with the billing process and I don’t want to put up with the mysteries of healthcare anymore. We have a lot of catching up to do.

Jeff Lin: I’d like to touch upon a couple of words you just used, the first of which is convenience, and in the prior response, you talked about relationships. These both fall under the umbrella of the retail experience, as you mentioned earlier. The theory that you’re postulating is that the role of a consumer is changing in healthcare payments. From your perspective, what do consumers want and how have they influenced change?

Deirdre Ruttle: Through my work with the annual Trends in Healthcare Payments Report, I’ve spent a lot of time looking at the data, looking at those consumer preferences and looking at how they bring those retail experiences to healthcare. It’s interesting that three out of four consumers have consistently said that they want to pay all their healthcare bills in one place. That idea or notion, that there is a centralized place for paying healthcare bills, is something new. But when you ask consumers, the majority of them absolutely want it. The interesting thing is that once you dig further into that, there isn’t any one place that is the silver bullet that they all want to go to in order to make those payments. From a strategy point of view, there isn’t any one thing to build that all the consumers will come to. There isn’t a field of dreams for healthcare payments.

But what the data shows is that this is a need that is across the board with consumers, regardless of generation and regardless, oftentimes, of socioeconomic status. What you need to do is build an experience as an organization where you allow consumers – whether you think of them as patients or members – to be able to make all their payments in one place. But it’s got to be convenient for them. I use the word convenience all the time because I truly believe we live in the convenience economy, and it keeps getting more convenient. One consumer might want to log in to their health plan’s portal and pay all their healthcare bills through that experience. Another consumer might want to make all their payments through a patient portal either through a provider or a healthcare system that they’re using for all of their healthcare needs. A third consumer might want to use their bank’s bill payments website to make all those payments. Consumers absolutely have different preferences when you look at the payment channels.

There are a lot of layers here, and that convenience plays out in a lot of different ways. Just like if we went out onto the street right now and asked 10 people how they pay their utility bills, they’re likely all paying their utility bills, but they’re paying them in different ways. We need to think about healthcare payments the same way.

Jeff Lin: We haven’t yet talked about the government and its role. Looking at the healthcare economy, US healthcare spending is still about 20% of GDP, if not more. Whether it’s with Obamacare, Trumpcare or whatever acronym or name you want to call it, what’s the role of government in terms of healthcare payments?

Deirdre Ruttle: That’s a great question. Healthcare and the act that is currently being discussed is making headlines on a daily basis. At the end of the day, though, when I look at it, I take a step back and say, regardless of the party that’s in control and regardless of the name of the act that is in place, consumers are going to take on more of the burden for overall healthcare costs. There are certainly valiant efforts to try to cut costs and make healthcare spending more efficient and cut the waste. But ultimately, no party, no act is going to be able to create the funding that is needed to pay for how expensive healthcare is.

When I think about it from a healthcare payments perspective, I am definitely watching the political climate and understanding what’s going on there, but ultimately, there still has to be that focus on the consumer and the consumer experience. Something within the realm of this discussion but we haven’t touched on, is how healthcare can be more affordable. Unfortunately, the best technology and the best payment experience is not going to be able to meet those needs. But when you look at the portion of the population that can afford to pay their bills, oftentimes they’re not paying them because they don’t understand what they need to pay or how to pay it. If we can help that problem and help providers deliver a better experience, help payers deliver a better experience that ultimately benefits that consumer, that’s where we need to focus.

Additionally, when you look at how politics plays out, you can try to take a commonsense approach when you look at healthcare and how much paper there still is and how many manual transactions are still happening every day. Regardless of your political affiliation, you can agree that the $9.4 billion estimate – which personally I believe is very low – would be better put back into healthcare, back into getting people better and keeping people healthy, as opposed to the waste that happens today.

Jeff Lin: As I think about this and all the politics that surround healthcare, it brings to mind something I was reading recently about MACRA. MACRA was legislation passed in 2015. The focus was on Medicare and Medicaid spending. It was all about managing costs and there was strong bipartisan support. The Senate voted for it 92 to 8. The House voted 392 to 37. It’s a reminder that government spending is going to stay flat or maybe increase a little bit, but there is strong support from both parties to focus on capping that spending. And therein lies the opportunity as you look at the commercial insurers like United Healthcare, Aetna and all the major health plans out there, where they’re focusing on consumers and so on. This is an amazing opportunity for a lot of these entities, and for the entire healthcare ecosystem, to capture the mindshare of consumers and engage with them in a unique way.

Tune in to Payment Matters weekdays at 4:30 AM, 12:30 PM and 8:30 PM ET.

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