Improved patient understanding of bills through an online account management tool
The Way of the Peaceful Warrior by Dan Millman
john.talaga@flywire.com
Welcome to the Outcomes Rocket podcast where we inspire collaborative thinking, improved outcomes, and business success with today’s most successful and inspiring healthcare leaders and influencers. And now your host, Saul Marquez.
Saul Marquez: And welcome back to the podcast. Today I have the outstanding John Talaga. He’s the Executive Vice President and General Manager at Flywire most recently OnPlan Health. OnPlan Health was acquired by Flywire in 2018. John has been a longstanding trust with customers through an unwavering dedication to delivering what they really need. In 2000, John co-founded HealthCom Partners, a leading provider of patient billing software and services for hospitals and health systems. HealthCom pioneered the patient friendly billing concept and consulted with the Healthcare Financial Management Association in the early stages of their initiative. HealthCom’s sold to McKesson which we are all familiar with in 2006 as their first acquisition to form Relay Health, a revenue cycle services company. At Relay Health, John led the patient billing and payment business for five years serving more than 1,000 healthcare providers. For all you folks listening revenue cycle in healthcare is a big big sticking point and an area of major improvement for everybody so there is going to be some great pearls shared here by John. But after Relay Health, John launched and led Healthcare Vertical for Docs so an award winning payment and document network that is transforming the way people connect with businesses to manage and pay their household accounts. So John overall has just a keen understanding of finance within health care and it’s a true pleasure to have him on the podcast today. John welcome.
John Talaga: Saul thanks for having me.
Saul Marquez: It is a pleasure. So John if anything at all that I miss in that intro that you want to fill in the listeners on?
John Talaga: No I think you covered it pretty well Saul thanks.
Saul Marquez: Cool. Now I’m glad. Now what is it that got you into the healthcare sector?
John Talaga: Well like anything it’s not always something that’s planned right. So in the late 90’s and I’m aging myself here we had co-founded a business with my co-founders Paul Hoffman and Jeff Porter and my partner Paul Hoffman, we had worked with Rush Presbyterian Health care here in Chicago and really identified a need that was a long problem in healthcare of sending out bills that patients simply didn’t understand and came up with a concept in which we coined the term patient friendly billing to make it much simpler for patients to understand what the relationship with their insurance payment was to their out of pocket and really what propelled in our business which we then incorporated as HealthCom Partners. We built in a product called Patient compass which was the first online account management tool in healthcare which allowed for the first time for hospitals to be able to transform the paper bill into an electronic account management experience so that they can see updated information, pay their bills online, and it may be hard to believe but in the early 2000’s online payments and health care was extremely novel. So that’s really what propelled our business and so really what focused to get into healthcare was you know healthcare was so underserved in terms of the patient friendly billing and payments part of the business in which we took advantage of really serving patient hospitals that had the need to make those improvements. And in one of the things all that I’ll mention that’s that’s important is when we went into endeavor and building patient compass which was the online tool we met David King. David King was at Infinite Solutions and what they did was they were the first ones that took higher education for student tuition management completely digital. So when we were looking to build a online solution for healthcare we were introduced to David and we essentially used David and his team to repurpose what they had done for higher education to apply it to healthcare because of there is so many similarities in terms of high liability to the consumer. And a third payer there is no financial aid in student tuition and there’s insurance health insurance and healthcare so kind of the marriage works really well.
Saul Marquez: Man that’s beautiful you know and a couple of things John thanks for the history there and folks you know a couple of things that I want to highlight about what John just mentioned. Number one if you look across the economy at different verticals there’s a possibility that a solution for a problem that exists is already there. So John kudos to you for seeing this and you and your partner on and just being able to unravel it put the team together behind it and execute. The similarities are just drastic. And then the second thing that comes to mind from your experience there is this idea of the user interface of health care. You know I had a one of the guys that was a co-founder at Singularity University that just said the opportunity to create businesses and healthcare just by improving the user interface are just like innumerable and you’ve done just that. So kudos to you and your team John for being able to make this happen.
John Talaga: Well thanks. Appreciate that.
Saul Marquez: So you’ve obviously been successful at making billing friendlier for patients and helping providers inevitably help the patients pay. What would you say is a hot topic that needs to be on every medical leaders agenda today and how are you guys addressing it at Flywheel?
John Talaga: Yeah Flywire.
Saul Marquez: Flywire.
John Talaga: Yeah. No. No problem. It’s a great segway to this because kind of going along sort of the the storyline in about 2007 as we all know the affordability of portable Care Act really started making the affordability of healthcare a hot topic whereas in the past when we launched patient compass, patient responsibility was about 10% of the net patient revenue at a hospital. The other 90% was collected by from insurance companies. And with this shift in high deductibles from the Affordable Care Act slowly but surely it made that 10% increase to 25 and sometimes it’s as high as 30%. So the old practices of sending a statements, trying to collect and wait for payments and then sent it to bad debt collections was no longer sustainable. When the hospitals were only collecting about 40% if they were doing really well. So it’s really become a crisis in terms of the affordability not only for the patients who are having difficulty paying their bills, 65% of the bankruptcies in the US are caused by medical expenses. It can’t be paid. So it’s a patient problem patient certainly a patient affordability in medical debt problem but it’s also a problem for the hospitals because if they’re not collecting 30% of the revenue then you can imagine what that does to their bottom line. So really the hot topic that we really kind of focused on with the launch of OnPlan Health in 2014 was really serving once again underserved need. So wasn’t so much the UI improvements that several businesses had made since the really health patient compost days. But it was more now about how do we leverage analytics to build, help the hospitals identify patients that can’t afford their bill upfront and then being able to take that and automate that process to give them an offer upfront to say “you may pay us a thousand dollars in what you owe which is about the average patient balance you know with their deductible. Or you can pay us a hundred dollars a month for 10 months.” And allowing that patient to self activate those offers by writing a check or going online to do it. So by doing that we’re able to really help focus the hospitals on automating. And reducing their administrative costs and collect more. And at the same time help patients. Pay an amount that they can actually afford Without having to call and ask for it.
Saul Marquez: Fascinating. Yes it’s the other end just more looking at analytics to help them maximize collections and then it’s that user friendliness for the patient as well that they can actually feel okay with going with whatever action they want to.
John Talaga: Yeah that’s right. Like you know in the old days it was about taking something that was essentially unreadable and making it readable and now it’s about changing the contents to say OK I understand that I owe a thousand dollars and I can afford it. So it’s really the patient friendly 2.0 if you will. Now it transforms into giving them content that’s tailored specifically to that patient’s willingness and ability to pay.
Saul Marquez: Gosh. That’s beautiful man. And you guys just layered on sort of the learnings from what you’ve done and just consistently tweaking it to make it even better every year. So give us an example of how the organization you’re part of now has created results by doing things differently.
John Talaga: Yeah for sure so the process that we innovated if you take an example of our hospitals that we’re working with one of them is 100 Hospital System Catholic Health Initiatives based out of Denver. And one of the things that they were struggling with was as many hospitals do they use early outs to help them. With the increase in patient responsibility comes more phone calls more credit card payments. And these hospitals typically don’t have the resources or funds to go hire a bunch of people. So there’s a lot of the early outs or. Extended business office companies. That allow that relief through call centers and being able to manage some of the administrative things of this higher volume of transactions. The downside that comes from that is is hospitals can sometimes lose control over that patient experience because they’re outsourcing so much of it to a standard process that they may not agree with. So what we’ve done at CHI and months in healthcare and Rush Copley medical Center here in town as well as Presence Health and others is we’ve been able to give them control of their patient experience while they still use the benefits of these outsourced extended business office companies. But what we do help them do is direct those accounts to be able to turn over that early out companies after they’ve run it through automation techniques so they can place less. As you would guess when you place accounts with these early companies. They’re expensive. It’s 30% of everything that’s collected. So by driving the automation we’ve been able to drive a 70% on average payment plans that are self activated by patients. So that means there is no phone call. The patients are getting what if we’re doing our job rights with the hospitals we’re getting it right by giving them offers they can afford and then they’re self activating so we’re not only driving that automation that results in less placements that early outs which is a direct savings and then less phone calls that come in and you can always tie patient complaints and satisfaction to how many phone calls come in because patients will call when they have a problem. So by reducing those phone calls by almost 40% is a direct tribute to how much we’ve been able to drive that patient satisfaction.
Saul Marquez: Definitely a testament to how well it’s working and if you’re a provider exact listening to this you know that you have your expertise and there’s things that you outsource. And it’s interesting today the opportunity to outsource doesn’t necessarily mean you’re outsourcing it to an outfit you could outsource to software. And I was talking to John before the podcast today and you know I was telling him one of the things that I enjoy is being able to create a forum where great ideas can be shared because oftentimes you don’t know what you don’t know. And today I hope that through my conversation with John you get to learn about a new opportunity where you can actually outsource to software what you’re currently outsourcing to an outfit and you know what try it because it might be better today might be that idea that gets you from A to B in a more efficient way. So John can you share with the listeners a time when you had a setback that made the product even better and we learned more from our mistakes. I’m interested in hearing about that.
John Talaga: Yeah. So you know it’s interesting I think anyone that has been in business not even businesses that they’ve started you realize that isn’t always one big setback right. Or a failure it’s a lot of little failures and little setbacks that does make you better. And so I could probably list and take up with the rest of the time listing about 50 things that we’ve experimented with and tested with and things that have worked so well and we came back and change in most of our ideas over time have come from customers right. So we’ve always been extremely customer sensitive in terms of what their needs are. They’re the ones that know the problems and oftentimes know the solutions or at least how they’d like to solve it. And then coming back and putting our heads together to figure out the right way to solve it. But if there is one that I’d probably point to which is kind of a broad concept is when after McKesson I started the health care vertical for Doc so that you mentioned in the in the opening and one of the things that I envisioned is that at some point the hospital payments patient payments like any other household payment really should be aggregated and made in one place. Right. So you can manage everything together with your finances. One of the things that I learned is you really can’t if there’s one thing about health care you can’t do as you can’t speed it along with other industries. And I don’t think healthcare is ready for that. While we’ve made some incredible strides with some large health systems that are are still moving towards aggregation. One of the things that we did in on plan is we kind of went back to basics and focused on solving the direct interaction engagement that hospitals want directly with them. They want that loyalty they want hospitals to be patients to be coming to them for their clinical questions and care at the same time of being able to to make payments in an easy way. So that was something that I learned kind of in a broader rather than the small setbacks was one large one that kind of reminded me of how we really need to approach healthcare because it really is an industry that’s like no other.
Saul Marquez: Yeah for sure. I think it’s a great call out. So what would you say the other side of the coin is John. What’s your proudest medical experience leadership moment that you’ve experienced?
John Talaga: Well you know I don’t think I have one to be honest with you it’s sort of the everyday one of the things that we’re doing it on plant and Flywire that gets me most excited and I think most proud my partner David King and I really bring it together higher education and healthcare. It’s you know healt care is always searched for other industries in terms of how it can learn from other industries and you hear Amazon a lot and that online experience and you hear other things as well. But higher education and healthcare probably the two that are most closely aligned. As I mentioned earlier with the high liability and the third payer that’s so critical of financial related insurance and we built one platform to serve both markets and what we’ve been able to gain from the higher education side to be able to apply to health care such as students being able to setup an automatic payment plan over their semester. We brought that to healthcare to be able to offer financial incentives as well as automation to the patient. So that’s being able to drive you kind of go to sleep at night and you bounce off your pillow in the morning and you get excited because we’re helping patients that can’t you know neighbors that can’t afford their bills and then when they get the average consumer cannot afford a four hundred dollar unexpected bill. And the demographics of health care is the world. Higher education is very focused on students 18 to 22 year old range. But the demographic for health care is the world. So there is a real need of unexpected expenses that can devastate a family and it really excites me to work with a team that is really focused on improving that.
Saul Marquez: That’s beautiful. It’s a great mission and I can hear the passion in your voice to tackle this challenge and very insightful you know this connection between academia and health in that it’s that third party payer and since you guys are adding value here and in the financial aspect of it, it makes so much sense. Can you tell us about an exciting project or focus that you guys are working on at Flywire?
John Talaga: Yeah. So we are bringing together. So as you just mentioned in the there’s academic medical centers that are all tied to universities so Flywire offers international cross-border payments so if you imagine you have these in terms of patient volume which is what every hospital is trying to increase you have more and more hospitals that are looking overseas to pull in patients that need expert specialty medical care that are able and willing to travel in to the US. So what you could imagine the problems with making payments in terms of the financial interchange and you know sending a wire and how difficult that is for a patient to pay. Overseas and cross-border. And how expensive that can be for providers and. They need that experience to be smooth for the patients so that they don’t have any barriers to come to their hospital for care. And they’ve got to manage costs because Whenever a patient comes from outside The US they’re paying the full balance upfront. So they have to have the money. It’s not. A collection effort like it is in the US. Right. So to make that process clean and inexpensive and smooth this is really important. So what we’re doing at Flywire. They do that for students is there as well as patients. While we’re doing at Flywire in on plan is bringing together. One experience. For at an academic medical center where you can be a student coming in overseas or you can be a patient coming in overseas and paying cross-border. And be able to pay from one place. And they’re still separate. Because you know hospitals will still. Manage their collections differently from students. And Academic medical centers. But managing those from a single platform single experience in a single pay partner. Like Flywire is critical and we’re so that’s something that is not every academic medical center still doesn’t see the connection. But that’s what drives us as well as to say. Hey there is connection. And we’re working that with a few academic medical centers right now that. We think would be really exciting.
Saul Marquez: That’s fascinating and kudos to you guys for seeing where the puck is going not just working where the puck is super exciting work but you guys are up to and you know that mission of alleviating those families from that financial strain is is a big big motivating force. Let’s pretend you and I are building a leadership course on what it takes to be successful in the business of health care and finance. I’ve got five questions for you lightning round style followed by a book that you could recommend to the listeners you ready?
John Talaga: I’m ready.
Saul Marquez: All right what’s the best way to improve health care outcomes?
John Talaga: I would say personalized digital patient engagement. So again this is focused on finance and revenue cycle. But I think if you can personalize that engagements I mean that’s what consumers expect. And I think that’s part of the best thing you can do to get a better financial outcome.
Saul Marquez: What’s the biggest mistake or pitfall to avoid?
John Talaga: I think no one with any business is trying to avoid boiling the ocean right. So don’t try to do too much. Be a specialist and be the best at it. Health care is so big and leaders need to stay focused stay with it and avoid distractions.
Saul Marquez: I love that. How do you stay relevant despite constant change?
John Talaga: That’s a great one. That’s always the constant challenge. But I think if anything it’s be very decisive in confidence in adding new innovation and not everything is going to is going to work right away. But sticking with it. So I don’t think you should seek perfection but you know get results out there refine, seek feedback, and refine again.
Saul Marquez: Great advice. What is one area of focus that drives everything in your organization?
John Talaga: That’s an easy one. Solving problems for your customers. So I mean our focus is always where customers are identifying the challenges and pain points that have and everything. If you talk to anyone in our business it’s really going to be customer first.
Saul Marquez: Beautiful. And finally what’s your number one success habit?
John Talaga: My number one success habit. Well some people that know me may say you know working late at night when there’s no distractions. So I’d have to say you know I wouldn’t recommend it to people because everyone has you know early mornings and everything. But. You know I have four kids and lots of activity going on after work as well so I’ve got my time 10:30 to 12. I just focus on things that I’m not able to accomplish during the day. So I actually cherish that time. So that’s probably my success habit.
Saul Marquez: Love it. Got to have that block time it’s awesome.
John Talaga: Yeah that’s right.
Saul Marquez: And what book would you recommend to the listeners?
John Talaga: So this may be surprising so I’m a self admitted non prolific book reader. I read a lot and it’s nice about things that are journals and keeping up with what’s going on in the markets and things like that. But there is a book that I always recommend to any age and any business person or non-business person because it’s called The Way of the Peaceful Warrior by Dan Millman. It’s a book that came at a critical time for me in terms of helping me find my direction. Know I just spoke to me in terms of how to live life, create your own meaning and opportunities. And I think a lot of that sort of thing has continued to drive me in my business, my business life as well.
Saul Marquez: Love the recommendation hadn’t heard of it before and we’ll definitely put it on the list for sure John and listeners, The way of the Peaceful Warrior. Add that to yours as well. Dan Millman. For all of the show notes as well as just a full transcript of our discussion links to companies we’ve mentioned as well as this book go to outcomesrocket.health/flywire that’s you can find everything there. John, this has been a blast I’ve really enjoyed our discussion. If you can just leave our listeners with the closing thought and then the best place where they could get in touch with or follow you.
John Talaga: Yeah. So I guess a closing thought. You know I was like the dimension is you know you see more and more capital being invested in healthcare than ever before. So anyone in health care you’re in the right place right. People want in and with that comes a lot of noise and it makes it difficult for leaders to kind of sort out what’s important and what’s not. My co-founder David King and I we always remind ourselves and our team of the why. Why are we doing what we’re doing. And at the end of the day it’s the reason people buy from you it’s the thing it’s the reason employees feel a sense of purpose. So if there’s anything I’d leave that would be it. And if people want to get a hold of me I’m very happy to respond. You can email me to my email address which is john.talaga@flywire.com
Saul Marquez: Outstanding John, hey really appreciate your insights today is just definitely a fascinating discussion. And so folks appreciate you listening as well. John thanks again for being with us.
John Talaga: The pleasure Saul. Thanks for having me.
Thanks for listening to the Outcomes rocket podcast. Be sure to visit us on the web at www.outcomesrocket.com for the show notes, resources, inspiration, and so much more.
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