Banks are taking a tag-team approach to attract customers in the increasingly automated health-care market, bundling commercial lending services with payments, technology management and other services.
"The commercial lending group will bring us in to demonstrate our capabilities to the provider," said Ralph Bernstein, the senior vice president of health-care payment solutions at U.S. Bancorp.
The combination of lockbox and payment technology, treasury management and other services helped secure an important recent contract, he said, though he would not name the customer.
An increasing number of financial companies have realized that delivering a bundled package of traditional banking products with treasury management and technology services can help them compete for health-care provider customers as payments messaging becomes a commodity.
Red Gillen, a senior analyst at the Boston market research company Celent, recently finished a study that found paper-to-electronic processing of explanation-of-benefits statements — a staple of health-care payments automation — is becoming commoditized, and many vendors offer EOB paper-to-electronic conversion functions that are comparable to what U.S. Bank is providing.
In the Senate's health-care reform bill, "there's language that calls for the health-care industry to standardize electronic messaging formats," Gillen said. This would force insurers to use the same electronic remittance procedures, which would further commoditize the technology.
Beyond information technology projects by payers and insurers to update claims systems, the legislation should make remittance efficient and standard.
But as one product becomes commoditized, another innovation is emerging. Banks are finding traction with revenue cycle management technology.
Managing revenue is harder now because health savings accounts and other self-directed payment plans make managing the timing and amount of payments tough for providers. About 5% of health-care payments came from patients about three years ago, but that figure should reach around 20% in the next couple of years, said Stuart Hanson, a vice president of health-care solutions at Fifth Third Bancorp.
"The more we can do to help the accounts receivable and revenue cycle process, the better it is on a number of fronts," he said. "More providers are looking to their banks and solution providers to provide back-end systems and accounting systems. That's opened a lot of doors."
Fifth Third, whose health-care RCM technology includes the bank's RevLink product, plans to use technology to speed payment negotiation and, in a reverse play, as a springboard to providing traditional financing to providers. "We have extensive credit relationships with providers, so with these providers," RCM can help expand the relationship, Hanson said.
At U.S. Bank, Bernstein's unit provides a Web-based payment tool that facilitates up-front collection of patient payables; integrates data with patient account systems; and offers other functions such as eligibility, estimation, one-time payment, payment plans and patient financing. Patients also have access to their accounts and can view statements, pay bills and update insurance information online. These services are pitched along with the bank's commercial lending group, which writes lines of credit and works with hospitals on bond issues, and/or the bank's treasury management group.
There's also potential for vendors such as Emdeon Business Services LLC, InstaMed Inc. and others that focus on automating health-care records processing to partner with banks. (Fifth Third and U.S. Bank would not name any of their technology partners.)
Emdeon is looking to form partnerships with banks to let banks rovide end-to-end automated payments processing, which would help with tasks such as matching the dollar amounts of payments and remittance statements.
"A bank doesn't want another bank to be able to do that for a health-care provider, because that bank can get a foot in the door for that client," said Tom Turi, Emdeon's senior vice president for financial services.
Firms that provide collections technology, such as InstaMed, hope reducing chargeoffs can be another lure. It offers clearing house services, payments estimations, transaction processing, claims submission, return mail capabilities and online mail options.
