AI as a Solution to the Looming Healthcare Affordability Crisis: A Strategic Insight from Dugan Winkie of Cedar

AI Revolutionizes Healthcare Finance: Patients Take Center Stage

SAN FRANCISCO, CA – August 24, 2024 – A pivotal shift is underway in healthcare finance as providers increasingly address the financial complexities arising from the growing number of patients with high-deductible health plans and rising self-pay rates. Technology, specifically artificial intelligence (AI), is emerging as a critical tool for navigating this evolving landscape.

Healthcare affordability has become a meaningful concern, prompting providers to re-evaluate financial strategies and embrace patient-centric approaches. Cedar, a leader in patient financial engagement, is at the forefront of this change with its AI agent, Kora. Kora is engineered to dramatically reduce billing-related call volumes – by as much as 30% – through hyper-personalized support that seamlessly connects with insurance payers, Health Savings Accounts (HSAs), and Medicaid programs.

The central message is clear: health systems must move beyond standardized patient portals and adopt tailored financial strategies. Leading financial strategists emphasize viewing patients as pivotal financial stakeholders and strategically partnering with AI vendors demonstrating measurable results rather than just promising innovation.But what does this shift concretely look like? And what are the long-term implications for the healthcare industry? Let’s explore.

The Rise of the Patient Consumer and The AI Solution

Historically, health systems primarily interacted with insurance companies regarding financial matters. Now, with a greater financial burden shifting to patients through higher deductibles and co-pays, engagement directly with these individuals has become paramount. This necessitates a transformation in how billing and financial assistance are handled.

Cedar’s Kora exemplifies this change. Using sophisticated AI, the platform proactively addresses patient financial questions, offers tailored payment plans, and navigates complex insurance processes, reducing the administrative burden on both patients and providers.Did You Know? An estimated 41% of U.S. adults delayed or forgone medical care in 2023 due to cost, according to a recent KFF study.

This trend underscores the urgent need for solutions like Kora, which promote financial clarity and accessibility.

How AI is Transforming Patient Financial Experience

The submission of AI in healthcare finance goes beyond simple call reduction. It’s enabling providers to:

Personalize Interaction: AI analyzes patient data to tailor messaging and financial options, making information more relevant and understandable.
Streamline Billing Processes: Automated workflows reduce errors and expedite claims processing. Expand Access to Financial assistance: AI can identify patients eligible for assistance programs and guide them through the application process.
Predictive Analytics: AI can forecast patient payment behavior, enabling proactive outreach and minimizing bad debt.

Here’s a snapshot of how AI is streamlining patient financial care:

Area of Impact	Conventional Approach	AI-powered Solution
Billing Inquiries	High call volume, long wait times	Reduced call volume (up to 30%), immediate responses via AI agent
Payment Plans	Generic plans, one-size-fits-all	Personalized plans based on patient income and circumstances
Financial Assistance	Manual screening, complex applications	Automated eligibility checks, streamlined application process

Looking Ahead: The Future of Healthcare Finance

The integration of AI into healthcare finance is not just a temporary fix, but a essential shift. Experts predict that as AI technology matures, it will play an increasingly vital role in creating a more obvious, affordable, and accessible healthcare system.The focus will be on creating a collaborative relationship between providers, payers, and – most importantly – patients.

Pro Tip: CFOs should prioritize AI solutions that demonstrate a proven track record of improving patient financial experience and reducing administrative costs.

What steps is your institution taking to adapt to the changing dynamics of healthcare finance? How can technology better serve the evolving needs of patients?

Resources:

Connect with Dugan Winkie on LinkedIn: https://www.linkedin.com/in/duganwinkie/
Follow Cedar on LinkedIn and explore their website: https://www.cedar.com/
* Listen to Dugan’s previous episode: https://poddtoppen.se/podcast/1246067757/outcomes-rocket/ais-role-in-building-a-better-healthcare-finance-future-with-dugan-winkie-head-of-commercial-strategy-for-cedar

## Summary of “Cedar’s Outlook: Dugan Winkie on AI-Driven Financial Engagement”

The Escalating Cost of Healthcare: A System Under Strain

The United States healthcare system faces a critical challenge: affordability. Rising healthcare costs,coupled with stagnant wages and increasing deductibles,are creating a crisis for individuals and families. This isn’t simply a financial issue; it impacts access to care, preventative medicine, and overall public health. According to recent data from the Kaiser Family Foundation, average family health insurance premiums have increased considerably over the past decade, and out-of-pocket expenses are also on the rise. This situation demands innovative solutions, and increasingly, the focus is turning to artificial intelligence (AI).

Cedar’s Perspective: Dugan Winkie on AI-Driven Financial Engagement

Dugan Winkie, Chief Product Officer at Cedar, a healthcare financial engagement platform, argues that a notable portion of the affordability problem stems from a deeply flawed patient financial experiance. Customary billing processes are complex, opaque, and frequently enough lead to confusion and frustration. This results in delayed payments, bad debt for providers, and increased financial stress for patients. Cedar’s approach, and Winkie’s vision, centers on leveraging AI in healthcare to personalize and simplify this experience.

“We’ve historically treated patients like they’re all the same when it comes to their financial capacity and understanding,” Winkie stated in a recent industry webinar.”AI allows us to move beyond that one-size-fits-all model and deliver tailored financial solutions that meet individual needs.” this includes smart payment plans, proactive financial counseling, and clear billing facts.

How AI is Transforming Healthcare Financial Processes

Several key areas within healthcare finance are ripe for AI disruption:

Revenue Cycle management (RCM): AI-powered RCM systems can automate tasks like claim submission, denial management, and payment posting, reducing administrative costs and improving efficiency. This translates to lower overhead for providers, potentially leading to lower costs for patients. AI-powered RCM is becoming increasingly elegant, utilizing machine learning to predict and prevent claim denials.

Prior Authorization: The prior authorization process is notoriously cumbersome and time-consuming. AI in prior authorization can automate the review of medical necessity, reducing delays and administrative burden for both providers and insurers.

Price Clarity: AI can help patients understand the true cost of care before receiving services. By analyzing historical data and factoring in individual insurance plans, AI-driven tools can provide accurate and personalized cost estimates. this is crucial for informed decision-making and avoiding surprise bills. Healthcare price transparency is a growing regulatory focus, and AI is a key enabler.

Personalized payment Plans: AI algorithms can assess a patient’s financial situation and offer customized payment plans that are affordable and sustainable. This reduces the risk of bad debt for providers and helps patients avoid financial hardship. Patient financial engagement is significantly improved through these personalized approaches.

Predictive Analytics for Bad Debt: Machine learning in healthcare can identify patients at high risk of defaulting on their medical bills, allowing providers to proactively offer financial assistance or choice payment options.

Real-World Impact: Cedar’s Case Studies & Results

Cedar has demonstrated tangible results with its AI-powered platform. For example, a partnership with a large health system in the Northeast resulted in:

A 30% increase in patient payment rates.

A 25% reduction in bad debt.

A significant improvement in patient satisfaction scores related to billing and financial experience.

These results highlight the potential of AI to not only improve financial performance for providers but also to create a more positive and supportive experience for patients. Similar success has been reported with other hospital systems utilizing cedar’s technology, demonstrating the scalability of the solution.

Addressing Concerns: Data Privacy and Algorithmic Bias

While the potential benefits of AI in healthcare finance are significant, it’s crucial to address legitimate concerns about data privacy and algorithmic bias. Protecting patient data is paramount, and healthcare organizations must adhere to strict regulations like HIPAA. Furthermore, AI algorithms are only as good as the data they are trained on. If the data contains biases, the algorithm may perpetuate those biases, leading to unfair or discriminatory outcomes.

Winkie emphasizes the importance of responsible AI progress and deployment. “We need to be incredibly diligent about ensuring that our algorithms are fair, transparent, and accountable,” he explains. “This requires ongoing monitoring, auditing, and a commitment to ethical AI principles.” HIPAA compliance and robust data security measures are non-negotiable.

The Future of AI in Healthcare Affordability: Beyond financial Engagement

The request of AI extends beyond financial engagement. Future possibilities include:

AI-driven care coordination: Optimizing care pathways to reduce unneeded costs and improve patient outcomes.

Drug discovery and development: Accelerating the development of new and more affordable medications.

Personalized medicine: Tailoring treatments to individual patients based on their genetic makeup and lifestyle.

Remote patient monitoring: Utilizing AI-powered devices to monitor patients remotely and prevent costly hospital readmissions. Telehealth and AI are increasingly intertwined.

Benefits of Implementing AI Solutions in Healthcare Finance

Reduced Administrative Costs: automation streamlines processes, freeing up staff to focus on higher-value tasks.

Improved Patient Satisfaction: Personalized financial experiences build trust and loyalty.

Increased revenue Capture: Faster and more accurate billing leads to higher payment rates.

Reduced Bad Debt: Proactive financial assistance and personalized payment plans minimize losses.

Enhanced Price Transparency: Empowering patients to make informed decisions about their care.

Better Data-Driven Insights: AI provides valuable data on patient financial behavior,enabling more effective strategies.

Practical Tips for Healthcare Organizations Considering AI

1. Start Small: Begin with a pilot project in a specific area, such as claim denial management.
2. Focus on Data Quality: ensure your data is accurate, complete, and consistent.
3. Partner with Experts: Collaborate with AI vendors who have a deep understanding of the healthcare industry.
4. Prioritize Data Security: Implement robust security measures to protect patient data.
5. Monitor and Evaluate: Continuously monitor the performance of your AI systems and make adjustments as needed.
6. Invest in training: Equip your staff with the skills they need to work effectively with AI-powered tools. AI training for healthcare professionals is crucial for successful implementation.

The integration of AI into healthcare finance isn’t merely a technological upgrade; it’s a strategic imperative. As Dugan Winkie and Cedar demonstrate, a patient-centric, AI-driven approach can address the root causes of the affordability crisis and create a more sustainable and equitable healthcare system. Digital health solutions powered by AI are poised to reshape the future of healthcare.