Category: Health

Alpha Sophia, the leading provider of healthcare commercial intelligence software for Medtech startups and SMBs, proudly announces the launch of their new, fully transparent software plans:

The Pro plan ($4,800 per year) offers MedTech and digital health companies an intuitive interface to access comprehensive practitioner data nationwide. With 360-degree profiles of every physician and a wide range of filters, it’s the most cost-effective solution available by a stretch.

Breaking barriers, the newly unveiled Max plan ($14,800) builds upon the Pro plan, including full coverage of all-payor claims data and CCSR diagnosis groups. The first to offer transparent pricing in this space, Alpha Sophia is changing the industry by allowing teams of all sizes and maturity to harness deep insights and targeted information.

At Alpha Sophia, the mission is clear: to empower growing MedTech companies to make a meaningful impact in healthcare through precise and actionable targeting data. Learn more about how their innovative solutions can drive success at www.alphasophia.com.

Handl Health, a first-to-market AI platform for benefits consultants to design and deliver affordable health benefits, raised a $2.5 million Seed round. Mucker Capital and Everywhere VC led the round with participation from Tau Ventures, Riverfront Ventures, DHVP (Digital Health Venture Partners), Boutique Venture Partners, Plug and Play Ventures and Techstars. The fresh capital will help Handl Health to realize its vision of revolutionizing employer-sponsored healthcare through data-driven health plan design and management, according to press release.

Additionally, Handl received a $1.3 million Phase II SBIR grant from the National Institute of Nursing Research of the NIH for the development of an interconnected system that manages pre-appointment billing and payment of healthcare services between third party administrators, providers and plan members.

To learn more, click here.

Alaffia Health, a generative AI for health plan claim operations businesses, raised a $10 million Series A funding round. FirstMark Capital led the round with participation from GingerBread Capital and existing investors including Anthemis, Aperture Venture Capital, 1984 Ventures, Remarkable Ventures, and Tau Ventures, according to a press release.

In 2023, the company launched a generative Ai tool to help health insurance claims teams and claim reviews.

To learn more, click here.

Summer Health, a digital health company offering 24/7 pediatric support to parents, announced $11.65 million in Series A Funding. New investor 7wire Ventures and returning investor Lux Capital led the round. Participation from returning investors included Sequoia Capital, Metrodora Ventures, Box Group, and Shrug Capital. New participating investors included Pivotal Ventures, a Melinda French Gates company and Leaps by Bayer. Alfred Lin of Sequoia Capital, Deena Shakir of Lux Capital, Alyssa Jaffee of 7wire Ventures, and Chelsea Clinton of Metrodora Ventures are also joining the Summer board, according to a press release.

To read more, click here.

Picture: akindo, Getty Images

Pharmacogenomics (PGx), the study of how genetic profiles impact an individual’s responses to medication, has already begun to help healthcare providers (HCPs) optimize care through its capacity to preemptively enhance drug efficacy, minimize adverse side effects, and improve patient experiences. This rapidly growing field marries bioinformatics and pharmacology and represents a transformative new era of precision medicine and highly personalized treatments, one that serves patients by supporting clinicians to better predict therapeutic responses and more accurately optimize drug dosages.

But, with data-driven solutions come data-driven challenges, not the least of which is the size and complexity of the datasets that pharmacogenomics relies upon. The vastness of genomic data and patient responses to medical treatments requires a herculean human effort to analyze, and because distinguishing meaningful patterns (signal) from irrelevant data (noise) is such a significant challenge in large-scale data analysis, researchers may overlook vital connections between genetic information and patient drug responses. 

AI speeds up PGx insights & expands possibilities

AI has the potential to help PGx manage its data analysis challenges through its capacity to efficiently analyze enormous datasets and identify patterns and correlations that may otherwise remain obscured, aiding researchers and manufacturers in the production of new, more effective medications. Similarly to how AI is used in industries like aerospace for predictive maintenance (e.g., analyzing jet engine data), AI systems in healthcare can excel at cutting through the noise; that is, differentiating normal genetic variations from those that signify disease or predict drug responses, a process for human researchers that is analogous to finding a needle in a haystack. But, AI-driven PGx systems can also help patients directly.  By using their patient’s genetic profile data. HCPs can better predict individual responses to specific medications and help make informed treatment decisions that lead to better treatment outcomes.

AI-driven systems can also harness patient data to create digital twins–simulations of a patient’s physiological state–that then can be used to test different treatment strategies and gain new insights from individually-tailored drug interaction data. This technology allows HCPs to swap the traditional trial-and-error approach of many medical treatments with better, more individualized plans that can have better outcomes. For chronic illnesses, like diabetes, the flexibility of digital twin technology also means that providers can monitor, manage, and predict how lifestyle and medication changes can impact things like blood sugar levels, allowing for personalized treatment plans to be more adaptive and responsive to the patient.

Challenges of AI-driven pharmacogenomics

Despite its potential, however, AI in pharmacogenomics faces significant challenges. Because the data sets of genomic information and individual patient responses to medications are so large and so widely distributed across a variety of research platforms, electronic patient record systems, and laboratory information management systems, integrating traditional PGx tools with the data to extract reliable insights becomes difficult. 

HCPs looking to integrate pharmacogenomics systems into their practice also face significant resource challenges themselves. While tool affordability and labor costs for implementation are always top-of-mind, the in-house need that providers face for the genomic expertise necessary to derive clinically relevant, actionable insights from these vast data sets is a significant additional barrier.

Results-driven AI tools

A diversity of emerging AI tools have begun to address such potential challenges and demonstrate tangible results in PGx research and clinical applications while solving these data integration and provider adoption barriers. However, for HCPs choosing which tool to adopt, some differentiators are more important than others. AI-driven extractor tools, for example, that deploy as an interface to other electronic data systems (including Electronic Health Records) would be far-preferred for clinicians because of the resulting enhancement in data integration and improved interoperability, especially if these tools were also more affordable than others on the market. 

The best new tools also leverage AI and advanced deep-learning models to improve the accuracy of variant calling. Variant calling is the process of distinguishing genuine variants from errors, and because pharmacogenes tend to have more complex genetic variations and need to be analyzed differently than typical disease-related genetic variants, the process is complicated for traditional PGx tools. The right AI models, however, that are trained on large, annotated genomic datasets and use established variant-detection algorithms, are reliably better at variant calling and produce much more precise predictions for clinical applications.

Finally, the maintenance plan of a tool – how the data is updated to further train the underlying AI – is also a key differentiator, and some new genomic extractor tools are able to leverage consumer DNA testing and whole-genome sequencing (WGS) by partnering with genetic testing companies and labs, making them attractive candidates for HCPs. These tools can extract PGx data from WGS data, allowing them to expand their genetic services into PGx without collecting additional samples or developing additional tests. The result is the generation of robust clinical insights that can be actioned by the HCP at the point of care without requiring further expert analysis. 

New frontier in pharmacogenomics

Pharmacogenomics as a field is already beginning to revolutionize healthcare, both in the research that providers rely on and the point-of-care, personalized decisions that they make with their patients. With the help of AI, the predictive capabilities of pharmacogenomics are even greater, and with the right tools, HCPs have the potential to create a new standard-of-care from this industry-wide paradigm shift that is as precise and powerful as it is patient-centered. 

Photo: Khanisorn Chaokla, Getty Images

Peter Bannister, DPhil, serves as UGenome’s Chief Product Officer for UGenome AI, a precision medicine tools company enabling treatment and dosing to be personalized for every stage of therapeutic development.

Alan Kohler, PhD, serves as UGenome AI’s Director of Strategic Communication.

More than 90,000 Americans are waiting for a kidney transplant that could save their lives. Unfortunately, every day, 12 of those people die waiting for a transplant. The number of people who need a kidney transplant will continue to grow as more than 37 million people in the U.S. are living with kidney disease – yet an astounding 90% are not aware they have it. While the overall organ transplant patient pool is expanding, there just aren’t enough organs to meet current or future needs. We need to find a better way. 

While more can, and should, be done to increase the efficiency, effectiveness, and fairness of our country’s kidney transplant system, we must recognize that our current healthcare system falls short by not doing enough sooner, before people with kidney disease find themselves in the position of needing a new kidney. 

We need to invest more time, effort, and resources on the front end of care to reduce the need for transplantation in the first place. Early detection must be a priority, so that clinicians can initiate therapies to delay progression. We need the mindset that we consider it a failure each time a chronic kidney disease (CKD) patient progresses to a point where they need dialysis or a transplant. We will never have 100% success, but we can do better.  

The progression of CKD from stage 1 to stage 5 (kidney failure) can be delayed by treating the other conditions that coexist and sometimes directly impact disease progression. This would include conditions such as cardiovascular disease, diabetes, and high blood pressure. Simple steps also include stopping smoking and addressing obesity. Better addressing these concerns in the earlier stages of the disease will also lower hospitalization risks, improving a patient’s journey while creating huge savings for patients and the healthcare system.  

Kidney patients benefit when they have access to a nephrologist. No matter if it’s early or late in their progression, outcomes are better. Early kidney disease identification allows patients to have more time to work with their providers to effectively manage their CKD, slowing any need for dialysis or transplantation. Access to education empowers patients to make decisions which are appropriate for them. This is best accomplished when no one is rushed, rather than in a hospital setting after a patient has “crashed” into dialysis. 

Our healthcare system must find ways to promote care models that break down any barriers to access to care. These same care models must encourage communication among caregivers across sites of care. No more silos. Let’s do away with the current fragmented system that focuses on volume not value. For too long, nephrologists and nephrology practices have operated in a traditional fee-for-service model that provides payments based on the services they deliver to a patient, rewarding the amount of care but not necessarily the quality of that care. Give physicians room to address barriers to care before a patient’s disease progresses. This will help ease the burden on the transplantation system and on patients themselves. 

If we are going to move the needle on reducing the need for kidney transplants, we need to increase adoption of value-based care (VBC) arrangements that align provider incentives with patient outcomes in a pay-for-performance structure.  

In VBC models, nephrologists are reimbursed for slowing kidney disease progression and offering 360-degree support to enable treatment of the whole person, not just a disease or collection of symptoms. VBC arrangements empower and encourage providers to offer support and services such as care coordinators, nutritionists, behavioral health specialists, and pharmacists, along with providing additional support like transportation. The goal is to prevent hospitalization by anticipating problems, then addressing them prospectively before it becomes a crisis.  

People do not have to die waiting for a kidney. A VBC approach can very logically and naturally lead to earlier identification of kidney disease and better management in its earlier stages. Private and government insurers, along with policymakers, must continue to explore and adopt pay-for-performance models that can reduce the overall need, and wait time, for kidney transplants. 

Photo: peterschreiber.media, Getty Images

Dr. George Hart brings a 30-year career in nephrology and as a practicing physician to his role as Chief Medical Officer for Interwell Health, a kidney care management company that partners with physicians on its mission to reimagine kidney care. He previously served as President of Metrolina Nephrology Associates in Charlotte, North Carolina where he led a practice of 80 providers, while also serving as a medical director for Fresenius Kidney Care. Dr. Hart has specialized in transplant nephrology and previously served as the medical director for the kidney and pancreas transplant programs at Carolinas Healthcare system (now Atrium Health) and as a Clinical Assistant Professor at UNC Chapel Hill. He earned his MD from Wake Forest University.

Walgreens announced this week that it is expanding its specialty pharmacy offerings to include cell and gene therapy services. The move could allow Walgreens to play a bigger role in a growing market — research shows that specialty medications now account for more than half of the country’s prescription drug spend, despite making up a small percentage of total prescriptions.

With the announcement, the pharmacy giant introduced a newly integrated business unit called Walgreens Specialty Pharmacy. The unit encompasses most of Walgreens’ assets in the specialty pharmacy space, including specialty pharmacy subsidiary AllianceRx. 

This unit will fall under Walgreens’ core retail pharmacy division. On the other hand, Shield Health Solutions — Walgreens’ subsidiary that supports health system pharmacies — will remain under Walgreens’ U.S. healthcare division.

As a newly rebranded business unit, Walgreens Specialty Pharmacy will include an 18,000-square-foot innovation center in Pittsburgh, nearly 300 community specialty pharmacies, four central specialty pharmacies and more than 1,500 specialty-trained pharmacists. The unit also has a growing roster of 240 limited distribution drugs, according to Walgreens’ news release.

Industry experts weren’t shocked by Walgreens’ announcement, saying that it makes sense that a huge pharmacy company would want to deepen its presence in the fastest growing segment of drug spend.

Joy Liu — CEO of Plenful, a company that provides automation tools for pharmacies — noted that healthcare is evolving, and Walgreens, just like any other healthcare company, needs innovative strategies to stay competitive. 

“Specialty pharmacy services are lucrative and in high demand given medical advancements and an aging population,” she wrote in an email. “This is an exciting step for both Walgreens itself and the patients under their care.”

By expanding its specialty pharmacy services, Walgreens can diversify its offerings. This could lead to the company enhancing its value proposition and relationships with patients, payers, providers and pharmacy benefit managers, Liu explained.

In her view, success will depend on how well Walgreens can “align its goals across business units and utilize the best tools to streamline its workflows and capture growth.”

Another industry leader — Rick Ratliff, CEO of MedAdvisor Solutions, which provides patient engagement solutions to pharmacies — said he wasn’t surprised about Walgreens’ announcement given the company’s massive scale and the impressive number of people it engages each day.

“Walgreens is very well positioned to help patients access specialty medications faster, which will have significant positive impact on healthcare outcomes,” he declared.

Many individuals who are prescribed specialty drugs have to navigate a complicated process to even access their medication, Ratliff noted. This process often involves prior authorization, verifying benefits coverage and determining options for financial support.

This means that specialty pharmacy services aren’t always accessible to the patients who need them, Ratliff explained.

“If people have an ability to go through these processes with [a brand] they know and trust, such as Walgreens, the value proposition for those individuals increases significantly — in addition to the fact that they will get on therapy faster and be successful in their medication journey,” he said.

Like Ratliff and Liu, Coresight Research CEO Deborah Weinswig also thinks that Walgreens’ decision to go deeper into the specialty pharmacy market could yield several strategic benefits. 

Entering this market offers substantial revenue opportunities due to the higher profit margins associated with specialty medications compared to traditional drugs, she pointed out.

“Considering the recent challenges presented to some in M&A, launching versus acquiring might be the best direction to go right now,” Weinswig wrote in an email. “As we look at trends within healthcare, there is a clear shift toward providing more integrated healthcare solutions.”

She noted that this expansion positions Walgreens to better compete with key industry players that have already established specialty pharmacy services, such as CVS and Cigna’s Express Scripts.  

Walgreens’ move could also help the company diversify its customer base, Weinswig added. By providing specialty pharmacy services, Walgreens might enable itself to both retain existing customers and attract new ones who require these complex treatments, she explained.

And Weinswig believes Walgreens’ expansion in the specialty pharmacy segment is likely to influence a few broader trends in the industry.

She thinks the addition of Walgreens in the specialty pharmacy market could intensify competition, which could lead to more competitive pricing and improved service quality. Greater competition could put pressure on smaller specialty pharmacies, which could potentially lead to a consolidation within this niche of the market, Weinswig pointed out.

She also predicted that a more competitive specialty pharmacy market might spur innovations in medication management and patient care programs — which would improve treatment outcomes for patients, as well as boost efficiency for the greater healthcare ecosystem.

“Walgreens’ move to establish a specialty pharmacy business is a strategic initiative that not only seeks to capitalize on a lucrative segment but also positions the company for enhanced competitive leverage and customer engagement within the evolving healthcare landscape,” Weinswig wrote. “This development is poised to have profound implications on the industry, promoting competitive dynamics, fostering innovation and possibly catalyzing market consolidation.”

Photo: Joe Raedle, Getty Images

Market research statistics indicate that more than 300 million startups are launched globally each year. Of that amount, only about 10% manage to become successful businesses.

Startups in the digital health tech industry are not spared this reality. It is even more challenging for health startups to get off the ground since rigorous research and testing are often required when creating healthcare products. As many as 35% of startups fail due to misunderstanding the needs of the market, so the last thing a healthcare company wants is to spend countless hours building a platform that people are not interested in.

The lean startup methodology was created to help alleviate some of the fears in building a startup from scratch. Useful for both small and large operations, several well-known brands have adopted lean startup principles to build hugely successful products. The list includes Qualcomm, Dropbox and Toyota.

Let’s take a look at this unique system and how health tech startups can successfully adapt the principles to their business ideas.

What Is the Lean Startup Model?

The lean startup methodology is a set of principles that are used to launch and build out new ideas based on the explored desires of the target customer. It strategically allows startups to eliminate uncertainty in the market while laying the path to product development. The founding principles of the concept have mainly been credited to Steve Blank, a Silicon Valley entrepreneur whose works have led to groundbreaking articles on the topic, such as “Why the Lean Startup Changes Everything,” published by Harvard Business Review in 2013.

The difference between lean startup and the usual startup process

The lean startup method guides founders to use a scientific approach in turning ideas into businesses. In the traditional method, aspiring founders will draft complex business plans that they will use to entice investors in addition to hoping that their idea will be favorable to target users upon launch. This approach hides the product from customers for as long as possible, so there is nothing to indicate whether the product will satisfy their needs.

With lean startup, the emphasis is placed on ascertaining from the customer the pain points or unmet need without introducing a product. Once the burning need has been identified, a value proposition is generated that requires validation with potential customers. The response is measured, and the results are used to determine what features and characteristics the product should have that will drive customers to use it.

Using the lean startup methodology to build your own startup

Moving from concept to a full-fledged startup can pose many challenges, which may include finding resources, building a network, and acquiring the necessary skills to kick-start ideas. Navigating the hurdles call for careful consideration, and this is where I found value in employing the principles of Steve Blank’s lean startup method.

Breaking down the lean startup method

Success or failure in launching any kind of business typically depends on how well your product can find favor with the target market. It is more than having a great idea and proceeding to craft an enticing business plan. Lean startups consider this fact and set out on a continuous process of trial and error, all while constantly revising and discarding ideas as needed.

Here is a breakdown of the steps:

• Ideation
• Hypothesis testing
• Building a minimum viable product (MVP) for gathering customer feedback
• Revising the hypothesis accordingly
• Building a product
• Continuous testing for product improvement or expansion

The first step in the process after understanding the pain points and unmet need is to validate the value proposition. Having established a hypothesis, the next step in the lean startup system is to create a minimum viable product. The MVP is a bare-bones version of the product you want to build.

What it does is allow you to test out the main features of the product on real customers in your target audience, collect data, and be able to measure customer interest accordingly. If the feedback is favorable, that is a signal to proceed. If it is negative, the startup can choose to scrap the idea or use the feedback to pivot accordingly.

I leveraged Steve Blank’s lean startup principles toward developing an MVP, which was introduced to hundreds of potential customers. The target audience is pediatricians and child neurologists.

In addition, we wanted to determine what kind of product would be most convenient and comfortable to use for patients. The MVP we built enabled doctors to find out exactly what kind of data they wanted from the product, precisely when it would be necessary to capture that data, and how the product would need to work so that the whole interaction between doctor and patient would be seamless.

After some amount of back and forth, we were able to craft a product that matched up with the discerned pain points of the doctors. However, when the solution was introduced, it was revealed that the doctors did not need the level of detail or amount of data the tool was able to deliver. Fortunately, the use of the lean startup principles meant that we could use the feedback from doctors to further tweak the product. We went on to build a smartphone app, which sees patients recording selfie videos that allow doctors to extract the precise data they need.

Continuous development of lean startups

Overall, the lean startup method is more concerned with conducting tests that lead to fulfilling a broader vision instead of following step-by-step business plans. Lean startups continue to use the system to ask questions that can lead to perfecting the product, developing additional products, and pivoting when necessary.

Photo credit: elenabs, Getty Images

Rachel Kuperman, M.D., a participant in the 2022 CharmHealth Innovation Challenge, is a pediatric epileptologist who directed the pediatric epilepsy program at UCSF Benioff Children’s Hospital in Oakland, California, for 10 years. While trained in physics and neurophysiology, she grew frustrated by the lack of data used to make critical decisions about the diagnosis and management of epilepsy, leading to no significant improvement in outcomes in 30 years. The cardiologists had Holter monitors and the endocrinologists had remote glucose monitoring, but the neurologist, at best, had a patient-generated seizure diary that was less than 50% accurate. While she could use powerful data generated in the hospital through complex brain mapping surgeries to understand where a child’s seizures were coming from, on a day-to-day basis in the clinic, she grew frustrated and disillusioned because her patient’s lives were a black box. She founded Eysz with the goal of using patient-generated data to transform the outcomes of people with neurological disease, starting with epilepsy.

The genetic medicines field is working toward therapies capable of doing their editing work inside the body by reaching many different types of tissue and cell types. Regeneron Pharmaceuticals and Mammoth Biosciences are joining forces to see if their respective technologies can deliver on that promise.

Regeneron is committing $100 million to Mammoth to kick off the agreement, which was announced Thursday.

Delivery to particular tissues is a long-standing challenge for genetic medicines. Lipid nanoparticles are one delivery method, but these particles preferentially go to the liver. Adeno-associated viruses (AAV) offer an alternative, but these delivery vehicles have limited capacity for genetic cargo.

The research of Tarrytown, New York-based Regeneron includes the development of AAVs that use antibodies to target their delivery to specific tissues and cell types. Brisbane, California-based Mammoth brings to the alliance its experience with CRISPR, particularly ultracompact gene-editing systems. Early biopharmaceutical industry CRISPR research used the Cas9 cutting enzyme, which is relatively large in size, said Janice Chen, a co-founder and chief technology officer of Mammoth. The startup is based on research from Jennifer Doudna, who won a Nobel Prize for her work in CRISPR. Doudna’s research also spanned other CRISPR proteins that are much smaller than Cas9. That’s key to the approach of Mammoth, whose CRISPR enzymes can fit on AAV with room to spare for more genetic cargo.

“We believe in the incredible power of gene editing, which we are utilizing in our diverse preclinical and clinical genetic medicines pipeline,” Christos Kyratsous, senior vice president and co-head of Regeneron Genetic Medicines at Regeneron, said in a prepared statement. “After years spent developing our next-generation delivery approaches, we are eager to combine them with Mammoth’s gene-editing systems to better match payload, delivery system, and disease type.”

Regeneron was already in the chase for in vivo CRISPR therapies through its alliance with Intellia Therapeutics. In 2016, the partners began collaborating on NTLA-2001, a CRISPR/Cas9 gene-editing therapy in clinical development for the transthyretin amyloidosis, a rare disease driven by abnormal versions of a liver protein. In 2020, the alliance expanded to hemophilia A and B. Last year, the companies expanded their partnership yet again to add neurological and muscular diseases.

Trevor Martin, co-founder CEO of Mammoth, declined to say which diseases his company and Regeneron will pursue. But speaking generally, he said they are genetic diseases in which in vivo editing could offer patients a one-time treatment.

“A single injection can potentially result in a permanent cure for the disease,” he said.

The financials of the agreement break down to Regeneron paying Mammoth $5 million upfront and making a $95 million equity investment. Regeneron gains access to Mammoth’s editing technologies, other than for certain excluded targets. Regeneron may pay an extension fee to extend its access to those technologies for two more years.

The agreement calls for the two companies to jointly select targets and research them. Regeneron will lead development and commercialization of potential therapies. The number of targets covered by the agreement was not disclosed, but Mammoth is eligible for up to $370 million in development, regulatory, and commercial milestone payments for each target, plus royalties from sales of approved products. The deal also gives Mammoth the option of co-funding and sharing in the commercialization of most of the collaboration programs in lieu of receiving milestone payments and royalties.

Mammoth’s initial focus was the development of CRISPR-based diagnostics. During the Covid-19 pandemic, Mammoth ramped up work in both diagnostics and therapeutics. Diagnostic applications of CRISPR are still part of Mammoth’s broader strategy, but the company is starting to focus more on therapeutics, Chen said. The company’s most advanced internal program is in preclinical development for two liver diseases. That therapeutic candidate is delivered by a lipid nanoparticle.

Regeneron is the third biopharmaceutical industry partner for Mammoth, following alliances with Bayer and Vertex Pharmaceuticals. Martin said the capital from Regeneron puts Mammoth in a strong financial position and the company does not have to immediately raise more money.

Photo by Mammoth Biosciences

As if news of record-high hospital bankruptcies and healthcare staff burnout wasn’t enough to shine a spotlight on the importance of revenue cycle management, just click around GoFundMe for additional evidence of the fallout from the healthcare affordability crisis. 

“GoFundMe has become a go-to for patients trying to escape medical-billing nightmares,” writes Elisabeth Rosenthal, an ER physician turned healthcare journalist, in her recent article in The Atlantic. Medical fundraising is the most common category of fundraiser the platform hosts, the author writes, going so far as to say some healthcare finance professionals are actually suggesting its use. 

The healthcare payment system is complex, and there isn’t one solution to affordability. But there is widespread agreement that healthcare systems need to take new approaches. And the latest Deloitte survey of healthcare CFOs shows that these leaders are looking at high impact levers to reduce costs and improve profitability, including improving revenue cycle and improving their offerings. 

Payment plans serviced in-house – which are very commonplace now – fall short of meeting today’s patient needs. Providers are limited on the amount of time they can carry those receivables on their books, and plans are typically structured in 12 month terms. That doesn’t work for most patients with a balance. More than half (56%) require more than 12 months to pay their balance, and need longer-terms payment plans. 

Embedding patient financing options into the billing process presents a very clear solution for providers and patients to balance affordability and increase collectability. Simply put, patient financing gives patients longer payment terms to fulfill their financial responsibility, allowing more patients to pay that would otherwise end up in bad debt. Providers that adopt it see immediate results, freeing cash trapped in A/R for reinvestment. Patients get options to ease the financial burden of carrying medical debt. 

Patient financing is rapidly evolving from the traditional medical credit cards and other financial vehicles and mechanisms providers and patients may be familiar with, and which now have the attention of federal regulators. The CFPB is examining the role of medical credit cards and loans as it looks to develop rules that will relieve consumer medical debt, specifically, to bar medical debt from consumer credit reports. (States like Connecticut are taking even more aggressive steps – working to cancel medical debt for thousands of residents).

These traditional options offer less favorable terms to those with poor capacity to pay, and are limited and inflexible. Patient financing is also not the same as the Buy Now Pay Later point of sale products consumers may be familiar with. 

Patient financing is designed to offer better, longer terms to those most in need. Conflating patient financing with these other options can cause confusion and hold up strategic buying decisions. 

A good first step is debunking some of the major misconceptions about patient financing – which I’ll do here.

What misconceptions slow adoption of offering patient financing options?

Myth: Patient financing is the same as Buy Now Pay Later.

Patient financing is sometimes conflated with another financial product – Buy Now Pay Later (BNPL). The no-questions-asked, point of sale line of credit has come under fire both for its potential impact on the financial well-being of consumers, as well as sustainability of BNPL businesses. It is the polar opposite of patient financing.

There are two reasons why.

• They enable very different business goals. The end goal of BNPL is to drive up the average cart price for the retailer. The retailer then receives the full amount of the unsecured, very short-term loan (six weeks) for a low-ticket purchase (on average, $135). Interest kicks in if consumers don’t pay on time. Patient financing is a viable option when the hospital is not likely to receive the full amount of the bill, and likely to be forced to write it off to bad debt. The patient most likely isn’t choosing the “purchase” and has little to no control over its actual cost – and would benefit from having a longer term (with no threat of interest) to pay it down. 

• They operate on very different business models.  Recall that BNPL providers fund the entire purchase price upfront. For this, they charge merchants a transaction fee, and consumers are then charged a flat late fee or high interest fee if they don’t pay the long according to the terms. Patient financing, on the other hand, funds providers for a discounted portion of outstanding receivables. 

Fact: With the right partner, patient financing is not BNPL. It is tailor-made for the complexities and unique economics of the healthcare industry. 

Myth: Patient financing comes with high, unclear interest rates. 

Consumer-friendly is not a moniker attached to typical installment loans and medical credit cards. This is largely because they use the traditional markers that deem patients credit-worthy. As a result, the loans come with high or unclear interest rates, high denial rates, and one size fits all payment terms. They are not ideal for providers because they are often recourse based, preventing providers from clearing the balance off their books.

It’s not surprising then that when asked what would be the most important parts of offering patient financing, healthcare financial leaders want them to be completely different from medical loans. 

Fact: Patient financing should be available interest-free for all patients who need to access it. It should be non-recourse and come with no surprise fees. 

Myth: Medical financing offers force patients out of the patient portal and payment experience. 

When asked what would be the most important parts of offering patient financing, the top requirement was having a partner that will manage plans serviced in-house and financed plans (90%) and embedding that functionality in the patient portal (86%). Financial leaders know that patient payment experience is important on a number of levels – and it matters to them. One of the best parts of their jobs, in fact, is the feeling that what they do actually helps people. 

The right financing partner has deep experience in integrating software with the system of record, bringing together data in the EHR system and external data sources to build a complete risk profile and serve up the right, personalized payment options to the patient online.

A vendor experienced with enterprise software integration is critically important to make sure: 

• Everything looks the same to the patient. They click and pick a plan, and can enroll in minutes, sans the paper-heavy process and separate applications such financing plans often come with.
• Providers enjoy the same, streamlined payment ease. Automated cash application eases reconciliation. Behind the scenes, the vendor should do the work of routing that payment to the right recipient – whether it is the provider or the company underwriting the loans – streamlining reconciliation.

Fact: Patient financing should be purpose-built for the unique challenges and considerations involved in managing medical bills.

The affordability crisis in healthcare has two faces – those of the patients, struggling to pay bills and often contemplating life-altering choices to pay for care, and the providers, struggling to stay open due to a confluence of factors, but one of which is predictable cash flow that drives high yield over traditional payment plans. Patient financing can help patients better afford their healthcare expenses while also ensuring providers are able to collect payments and deliver care.

Picture: MrIncredible, Getty Images

John Talaga brings more than 20 years of experience to his role as Executive Vice President of Healthcare. He has partnered with hundreds of healthcare providers to develop and innovate patient billing and payment solutions. Prior to joining Flywire, John was co-founder and CEO of OnPlan Holdings (acquired by Flywire), which launched healthcare’s first automated payment plan solution, as well as the next generation student tuition management solution for education. John also co-founded HealthCom Partners in 2001, which launched PatientCompass, a pioneer in patient-friendly billing and healthcare’s first online account management solution.

After HealthCom sold to McKesson (MCK) in 2006 as the first acquisition to form RelayHealth, John led the patient billing and payment business at RelayHealth for five years before launching and leading the healthcare vertical for doxo, a multi-biller payment network.

He is a member of and has presented extensively with Healthcare Financial Management Association (HFMA), Healthcare Information and Management Systems Society (HIMSS), and the American Association of Healthcare Administrative Management (AAHAM). John holds a bachelor’s degree from the University of Dayton.

Do you advise self-insured employers on healthcare benefits? With conference season in full swing, you are likely honing your perspectives on how you’ll guide your clients. Your expert insights will help provide a comprehensive perspective of the state of healthcare benefits for employers, what is changing and what has stayed the same in our second annual survey, the 2024 Benefit Consultant Sentiment THE INDEX.

The inaugural survey last year illustrated how the healthcare benefit landscape is evolving as several factors drive the need for change. It is becoming increasingly more complex for employers, with features such as new regulations, more vendor options, evolving point solutions, and advances in technology requiring greater breadth of knowledge. These factors are creating a more expansive role for consultants in order to serve the diverse needs of their clients.

Artificial Intelligence and how it can best be applied to addressing different healthcare benefit challenges is an important topic facing employers. How are you guiding and advising your clients on AI?

Take part in our survey and share some of the trends you are seeing among your clients. A full report of the findings will be available later this year.

As a thank you for participating, you may choose to enter a sweepstakes for a chance to win one of three $250 American Express® gift card by completing the survey.

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Technology has a long track record of improving patient care. But humans are now entering uncharted waters as the latest wave of digital tools impact healthcare clinical and administrative workflows. Technology advancements in artificial intelligence (AI) have spawned a fourth industrial revolution. According to the World Economic Forum, it’s a time in history “that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.” New developments in AI and automation in healthcare will offer numerous benefits to providers.

The impact of recent technology advancements in healthcare is staggering. New AI and automation tools can detect human illnesses faster, monitor patients in the privacy of their homes, and streamline laborious administrative healthcare workflows to save providers up to $360 billion annually.

The impact of AI and automation in healthcare is just beginning. Here are three ways these tools can help prevent and reduce claim denials, alleviate staff workloads and improve the patient experience.

1. AI and automation helps lessen claims errors

Experian Health’s State of Claims Survey 2022 reported that 61% of providers rely too heavily on manual processes and lack the automation necessary to streamline reimbursement. Billions of dollars are tied up in rejected claims; healthcare professionals say up to 15% of their claims are denied.However, many denials are preventable simply by eliminating human error stemming from manual workflows. When paperwork is still done by hand, mistakes in eligibility verification or incorrect insurance information are all too common.

Some of the typical reasons for claims denials include data entry errors. Claims are complex, and providers handle most revenue cycle tasks manually, so it’s common for incorrect insurance details, eligibility verification problems, or other inaccurate or missing information to make it through to claims submission.

Far from being science fiction, the newest AI-powered administrative tools can scan patient claims data to detect errors that lead to denials. Given that diagnostic errors alone cost more than $100 billion and affect 12 million Americans annually, this new breed of AI tools offers providers a way to improve care delivery while lessening the endless hassle of claims denials.

AI and automation tools can help eliminate up to errors that lead to denied claims. For example:

• Patient Access Curator automates insurance eligibility and coverage, scanning patient documentation for inaccurate information. The software uses AI and robotic process automation (RPA) to reduce manual errors.
• AI Advantage™ works to prevent denials before they happen:
  • AI Advantage -Predictive Denials spots claim errors before submission to the payer. It’s an early warning system designed to reduce denials by red flagging claims errors. But it also flags claims that fail to meet payer requirements—even if those requirements have recently changed.

2. AI and automation reduces manual processes and staff burnout

Manual processes in healthcare contribute significantly to burnout, which affects nearly 50% of staff. The cost of staff burnout and preventable turnover runs around $4.6 billion annually. However, overworked staff leads to mistakes in manual processes and ultimately claim denials, so the cost of burnout directly affects the revenue cycle.

Experian Health’s 2023 staffing survey shows 100% of healthcare providers say staffing shortages have impacted their revenue cycle. But staff burnout and turnover affect more than reimbursement—more than 80% say it also negatively impacts the patient experience.

AI and automation in healthcare can help alleviate the overwork that many staffers feel. Experian Health offers solutions to automate manual tasks, free up staff time, and reduce the volume of claims denials.

• ClaimSource® reduces the industry’s average claims denial rate of 10% or higher to 4% or less. This software automatically scans claims, payer compliance, insurance eligibility, and patient demographics to spot the errors that lead to denials. Automating claims submission lessens the administrative burden and improves the work/life balance for overburdened staff.
• AI Advantage – Denial Triage covers any claims that end up rejected, prioritizing claims with the highest rate of ROI for providers. The solution uses artificial intelligence to help staff organize their efforts toward the highest revenue generating opportunities to increase revenue collection. It can lessen workloads and help teams work smarter for a higher return and better bottom line.

3. AI and automation in healthcare improves patient experiences

Automation improves the patient journey. Experian Health and PYMNTS research show positive patient experience starts with self-service scheduling and registration. This kind of digital front door puts control back in the hands of patients, who are frustrated by time-consuming administrative processes. Patients have high expectations for better tech experiences throughout their healthcare encounters. Experian Health offers solutions that give customers exactly what they demand. For example:

• Patient Scheduling software allows 24/7 online access to appointment setting tools. In addition to making a more convenient and accessible scheduling process, this tool reduces the time it takes to set an appointment by 50%. The benefits for healthcare providers include a higher patient show rate (89% on average) and higher patient volumes (32% more patients per month).
• Patient Financial Advisor offers seamless, automated service estimates that go straight to the patient’s favorite digital device. The tool creates a transparent payment process to help patients understand their treatment’s cost and payment options. Patient Financial Advisor integrates with a secure online payment portal. These tools establish financial accountability up front while eliminating unnecessary surprises that affect the provider/patient relationship.

Benefits of AI and automation in healthcare

AI and automation in healthcare are changing how patients experience care delivery, how providers interact with their customers, and how clinicians manage getting paid. The benefits of using these tools include:

• Faster and more accurate patient diagnoses.
• Fewer patient readmissions and more proactive care management.
• Streamlined administrative tasks to reduce claims denials and improve the revenue cycle.

Experian Health offers a suite of technology solutions, including a revenue cycle data curator package, to help providers get paid faster, free up staff time, and improve the patient experience. These solutions can help healthcare organizations achieve their goals by harnessing the latest AI and automation technologies to work smarter. Connect with an Experian Health expert today.

A Seattle jury has decided that Providence underpaid more than 33,000 of its employees by willfully denying them breaks and rounding down their time on the clock. 

The class-action complaint was filed in 2021 on behalf of Providence nurses, technicians and other hourly employees. The case’s eight-day trial concluded last week, with a county judge ordering the health system to pay more than $200 million.

“It’s not everyday you see a judgment in excess of $200 million against a healthcare company for unpaid wages,” Jason Rittereiser, an attorney who represented Providence’s employees, said in an interview. “I think that sends a message to healthcare corporations — not just in Washington, but across the country — that if they fail to pay their employees, they will be held accountable.”

The complaint alleged that Providence used a policy — which was discontinued last October — that would pay hourly employees based on the time they work rounded to the nearest 15-minute increment. The health system also had policies in place to “discourage hourly employees from punching in more than seven minutes early for their shift, from punching in after the scheduled start of their shift, or punching out more than seven minutes after the end of their shift or shortly before the end of their shift,” according to the complaint.

Essentially, these policies prevented or discouraged workers from punching the clock in a way that rounding could benefit them — therefore meaning that employees’ working hours were consistently getting rounded down without the chance of ever evening out — the complaint explained.

This policy was in place despite the fact that Providence, like many employers, was using a digital clock to track its employees’ working hours “down to the second,” Rittereiser said.

The complaint also alleged that Providence systematically failed to provide a second meal break for hourly employees who were entitled to one. Per Washington state law, employers are required to ensure staff members get two 30-minute, duty-free meal breaks when they work a shift that is 10.5 hours or longer. Providence did not provide these second meal breaks to employees, yet the health system automatically deducted these breaks that workers should have received from their paychecks, according to the complaint.

“These are systemic wage violations that happened on a small scale each and every day for years. Ultimately, that adds up to be millions and millions of dollars. A single wage violation on behalf of an individual employee could go unnoticed — but the result of this trial speaks to the  massive, systemic size of these wage violations,” Rittereiser explained.

Damages for Providence employees’ unpaid wages totaled about $98 million, but Providence is being ordered to pay much more than that. Under Washington state law, employers must pay double the amount of damages if a judge determines that they made the wilful choice to withhold wages — and King County Superior Court Judge Averil Rothrock did just that. 

With statutory interest, Providence will have to pay a total closer to $220 million, Rittereiser said.

In a statement shared with MedCity News, a Providence spokesperson wrote that the health system values its employees and “remains committed to providing them comprehensive, competitive pay and benefits, and to making sure they are correctly compensated for time worked.”

The spokesperson also wrote that Providence disagrees with the plaintiffs’ claims that some Providence hospitals in Washington failed to provide appropriate compensation to workers.

“This case presented several new and complex wage and hour issues that are not addressed in Washington statutes or by the Washington Courts of Appeal. Along with other employers also seeking clarity on these Washington wage and hour issues, we intend to appeal this result,” the spokesperson’s statement read.

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