More often than not, medical bills are a source of confusion for patients and families. There is currently no standard for consumer medical billing documents: bills vary in content, presentation, and use of health industry jargon. Consumers also receive bills and explanations of benefits from multiple sources for the same episode of care long after the encounter. It can be difficult to understand what expenses the insurance plan covers and what amounts consumers are responsible for paying, and it can be difficult to verify whether the bills are correct or complete. This can result in anxiety or frustration, and can lead to problematic outcomes, such as hesitancy to seek care, non-payment, under-payment, or over-payment of medical expenses.
Patients often interact with many different people and organizations when they seek care, from their primary care physician, to the hospital where they may see a specialist or have a procedure, the lab where they may have a test done, the pharmacy where they get their medication, and their insurance company. They will also seek out information, recommendations, and resources on the Internet and from friends and family. The business relationships, data flow, and technology infrastructure of each of those organizations impacts the patient experience. Most of the entities involved have a relationship with the patient, but do not necessarily coordinate behind the scenes within their organization or with other organizations involved when it comes to the billing process. Many voices end up communicating with the patient, rather than one, cohesive voice. This leads to patients having to piece things together on their own and undermines patient satisfaction with both providers and payers.
Examples of the things a patient may see as they interact with various organizations throughout the process:
- From Providers & Health Systems: Bills and Financial Statements
- From Insurance Companies: EOBs and Claim Details
- From Various Organizations: Cost Estimators
The dual purpose of this challenge is to redesign the medical bill itself so that it is easier for patients to understand, as well as to innovate the experience of medical billing to make the financial aspect of health easier to manage.
Challenge participants are encouraged to review the research and insights below and consider it in their response to the challenge. Challenge participants are also encouraged to leverage a human-centered design process in the creation of their concept and to follow plain language guidelines. More information on these topics is provided below.
In addition to a survey with 300+ patients and families, Mad*Pow conducted one on one interviews with 25+ patients, families, and representatives from health systems, insurance companies, and integrated systems to uncover core issues and opportunities associated with medical billing and medical cost estimation.
Current State Journey & Ecosystem
- Example Current State Patient Journey: This journey illustrates one of the many ways a patient may experience medical billing. There are many variations to this core journey. This journey is provided as an illustrative example for participants to get a sense for how the medical billing system operates, and how issues manifest throughout the process.
- Ecosystem Map: This Ecosystem Diagram presents the many people, organizations, processes, artifacts, and environments that can be involved in the Medical Billing Ecosystem. The actors that become involved depend on the specific journey that the patient has. Please refer to The Current State Patient Journey for an example journey to see how these elements come together. Similar people, processes, artifacts and environments are aligned across columns.
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Guidelines, Checklists, and Regulations:
- Simplify the Medical Bill: A Clear Communication Checklist (Courtesy of the HHS Health Literacy Workgroup and the National Academies of Sciences, Engineering, and Medicine Roundtable on Health Literacy)
- This three-element Clear Communication Checklist is based on state-of-the-science health literacy, plain language and usability principles. Designers should use the list to help them meet the Challenge’s criteria for Clear Communication.
- Human-Centered Design Process Guideline
- Medical Bill Information and Data
- Federal & State Requirements: No federal regulations exist for the format of medical bills. However, IRS 501(r) regulations outline the notification requirements for financial assistance policies on the medical bill. From a state perspective, Vermont, Ohio, Wisconsin have rules and regulations related to medical bills. This source includes a summary of state requirements regarding when an explanation of benefits (EOB) should be sent to patients (current as of 2012). New York is an example of one state that requires EOBs include specific information.
Relevant Literature & Articles
Drowning in a Sea of Paperwork: Toward a More Patient-Centered Billing System in the United States. Annals of Internal Medicine (2016, Semigran HL, Mehrotra A, Hwang A)
Medical Bill Thought Experiment, (2016, Paul Kahn)
- The Medical Bill Mystery (May 3, 2015, New York Times)
- Understanding Your Medical Bill (Khan Academy)
- Top Five Reasons Why People Go Bankrupt (Khan Academy)
- Consumer Financial Protection Bureau. Consumer credit reports: A study of medical and non-medical collections (2014)
- This report provides a detailed account of patients' medical debt and emphasizes that medical unpaid collections are typically smaller than non-medical (e.g. credit card or student loan). There is also information on the confusion/uncertainty that patients face in the medical billing system and how this translates to medical debt
- Pricewaterhouse Cooper (PwC). Money matters: Billing and payment for a New Health Economy (2015, Health Research Institute)
- This report has interesting survey information about patient attitudes towards the medical billing system
- There are many good citations for past and current innovations within medical billing and making it more streamlined
- Confidentiality for Individuals Insured as Dependents: A Review of State Laws and Policies (2012, English A, Gold R, Nash E, Levine J. Guttmacher Institute and Public Health Solutions)
- This report provides a summary of the variation in state regulations for sending EOBs and the content of EOBs (beyond confidentiality concerns)
- Also provides state-specific regulations information related to acknowledgement of claims, payment of claims etc.
- Tables at the end of the report list the specific regulations, by state
- Healthcare Payer and Provider Practice: The Next Wave of Change for US health care payments (2010, McKinsey Quarterly) Pellathy T, Singhal S
- Follow up report to 2007 McKinsey Quarterly report included below, continues to emphasize problems related to consumer medical payments
- Health Insurance Literacy of Older Adults (2009;43(2):223-248) McCormack L, Bann C, Uhrig J, Berkman N, Rudd R
- Article about older adults' health literacy related to their communications with Medicare (EOBs, plan finders etc.)
- Kaiser Family Foundation. Medical Debt among People with Health Insurance (2014)
- This report has informative anecdotes about the burden of medical debt, including those related to a confusing billing system
- Confirms that patients find it difficult to distinguish between new bills and repeat invoices for unpaid, old bills
- Schoen C, Osborn R, Squires D, Doty MM. Access, affordability, and insurance complexity are often worse in the United States compared to ten other countries (2013, Health Aff – Millwood)
- This study has survey information about the extent to which U.S. patients face a confusing billing system compared to other countries
- Overhauling the US Health Care Payment System. McKinsey Quarterly (2007, Lecuyer N, Singhal S)
- This report summarizes some of the problems of the medical billing system and proposes some potential solutions, mostly centered on the payer/provider interaction
- An Overview of Consumer Data and Credit Reporting: Federal Reserve Bulletin (2003, Avery R, Calem P, Canner G.)
- Summary of the credit reporting system with some mention of medical debt
- A Guide Through a Medical Wilderness (Aug. 7, 2009, New York Times)
- UnitedHealth Group. Health Care Cost Containment - How Technology Can Cut Red Tape and Simplify Health Care Administration (2009, UnitedHealth Center for Health Reform & Modernization)
- This study summarizes some potential ideas to improve different aspects of the medical billing system, particularly related to decreasing the administrative cost burden
- EOBs issued by CMS were recently standardized, and these are some FAQs about that
There are many organizations that are active in the medical billing space. These organizations provide services that help consumers estimate the cost of care, view their bills, and pay their bills as well as services that help health organizations provide better tools and services to patients. The organizations listed below are provided as examples to give challenge participants a sense for what is going on in the marketplace. This list is not all-inclusive and challenge participants are encouraged to do their own marketplace research and analysis.
- iVinci Health: The VisitPay Patient Revenue Management system
- Simplee: A patient financial engagement platform
- Patientco: A patient payment platform
- Zirmed: A patient payment platform
- Castlight: A consumer health cost estimator
- PokitDok Payment Optimization: Payer/Provider data integration service
- PokitDok Marketplace: A health service location and health cost estimator
"I contacted both the provider and insurer to tell them about an error, which took two months to resolve. I should charge for my time."
- MAD*POW PATIENT SURVEY RESPONDENT
of Mad*Pow patient survey respondents rated their medical bills as confusing or very confusing.
"I got a statement from my insurance company saying I’d receive another bill, for what I don't know!"
- MAD*POW PATIENT SURVEY RESPONDENT