What do Banks have to offer Healthcare?

Most of the discussion during the Medical Banking Leadership Forum seemed to center around the idea of providing PHRs or processing transactions.  The idea goes that banks should somehow get involved in the Personal Health Record (PHR) space by providing platforms for customers to view their health records since so many of their customers are used to logging in through banks.  The other view is that banks are really good at processing transactions, and bank networks are secure, safe, and fast, and so healthcare transaction processing (many of these transactions being financial after all) should logically be handled by financial institutions.

I take a slightly different view.  First, while I think that banks should get involved in the PHR space, I think it should be in a different capacity than simply providing a spot to store or view health data.  Instead, I think that banks should instead focus on being in the identity management business, an “identity broker” if you will, and provide authentication services to any PHR vendor or hospital that might be interested.  If you think about it from the PHR vendor’s perspective, their service increases in value the more confidence they can have in the validity of the identities they serve.  Correctly identified accounts means you can combine them with other data sources (at the account’s request of course) so that the PHR can serve as the hub of a person’s medical data.  Incorrect data is almost impossible to manage or transfer between systems, and serves to defeat the original stated purpose of a PHR. The financial services industry (read: banks) are one of the few industries that take identity management SERIOUSLY.  Multiple forms of identification are required, addresses are consistently maintained, and people really care about making sure their passwords to their accounts are remembered and treated securely.  Nobody types their username and password to their checking account on their monitor at work, or sends it in an email to their friend who needs it, etc.

If I were a bank, I’d use that asset (the one-time and continuous identity management) and sell it to PHR vendors (again, with the account holder’s consent).  Instead of creating a new account with Google Health, let me authenticate with my Chase username and password, and everyone can feel comfortable.  The PHR can now rest assured it’s got clean data, the account holder trusts Chase and has an interest in maintaining their information. As for the second prevailing view: banks are the best at financial transactions, my response is, “So what?”  Maybe as some claim, everything in healthcare is a financial transaction (or should be a financial transaction) but that’s like saying lets let Visa and Mastercard determine the price of the car I’m buying.  Banks already process all the financial transactions, and without in depth knowledge of the services being rendered, they’re not going to be able to price, process, or provide transparency to healthcare claims. 

A lot of discussion seemed to revolve around the vein of “but we can get paid to move the data” and again, who cares?  If banks really wanted to get involved in the healthcare claims adjudication process, they should invest in technology tools that provide a platform for insurance plans to define and transaction rules related to services and payments.  Not a single bank in the Medical Banking Project (save for one that I talked with) has any desire to do this.  The solution for banks in this area is to get closer to the details, not farther away.  That’s where all the cost savings and the benefit of transparency exists anyway – at the long tail of the bell curve.  Banks should know better anyway, they’ve been preaching this for years.

Thoughts on Medical Banking

This past week, I was in Nashville attending the Medical Banking Project’s Leadership Forum, which was hosted by the Vanderbilt University Center for Better Health.  The Medical Banking Project is a think-tank whose goal is to raise awareness of how banks and healthcare can intersect and drive increased efficiency, visibility, etc.  The goal of the forum was to choose a few projects where the members could work together to pilot some use-case concepts that would demonstrate how these two very different industries could work together.When people hear the term “medical banking” they’re often confused, and that confusion doesn’t improve much even among the medical banking project members.  With such a broad scope and so many different vendors and other organizations involved, everyone’s definition seemed to be different.To pare things down, here’s a few points that most members would agree with:

  • Banks specialize in well defined discrete transaction processing coupled with high visibility.
  • Healthcare organizations specialize in complex decision making that often requires the distillation of large amount of data into generalized care protocols that are often adjusted based on specific peculiarities.
  • Financial organizations are not very well equipped to deal with “creative” or “non-standard” processes or products.  When your only tool for evaluation is a balance sheet, context gets lost very quickly.
  • Healthcare organizations face a really large challenge distilling down their very fluid, complex, customizable environment into financial transactions, and as a result, are really bad at providing visibility to anyone involved in the healthcare spectrum (patients, providers, payors, regulators, etc.).
  • Trends suggest that patients will become more responsible for costs out of pocket, and combined with rising expectations of online access and visibility, will begin demanding more from healthcare providers.

When you discuss these items with banks, they feel as though they can provide back office support to healthcare institutions and get paid for the transactions that would flow through their already-established networks.  Healthcare providers are generally just desperate to get out of the billing and payment nightmare that has been created for them so they can focus on providing care.The question is, how?This questions is particularly challenging when you have the CIO of Vanderbilt University Medical Center, Dr. Bill Stead, one of the Leadership Forum’s keynote speakers say with certainty that “we have no systems or technology available today that can provide what we need.”  Healthcare providers want more information that’s more accurate more quickly comprised of huge volumes of more data.  Banks and consumers want less information that can be presented as a line item on a statement, priced accordingly, and compared to other options quickly.The key, we all agreed while at the Forum, was a national network for transacting healthcare and financial data.  Where the group didn’t always agree, was whether querying the data in aggregate would be useful.  The bankers in the group pretty much didn’t understand how valuable such analytics could be and how much cost could be wrung from the system by examining the whys behind the transactions.  That’s typical.  Most who haven’t been in healthcare can’t imagine how small variances can introduce magnificent variations in the costs to provide a service or procure a product.  The healthcare entities in the group kept stressing that they wanted to provide the data, but had nowhere to send it and major challenges paying for the applications and training that would facilitate collection of the data.We’ve got a lot going on right now in the industry, what with the healthcare stimulus (ARRA), an increasing drive by Medicare and Medicaid to introduce pay-for-performance measures and more accurate reporting requirements (example: the Deficit Reduction Act of 2005), and a general push by everyone for better technology and better visibility.  Most of what we covered is too long for a single post, so I’ll continue to post thoughts on the Medical Banking Project over the next few days.