The following is a profile of just one of the thousands of revenue cycle leaders across the U.S. I'd like to thank Al Zezulinski for generously offering his time to provide his insights. If you are a revenue cycle professional at a healthcare organization and would like to participate in a profile like this, please contact me. I would love to hear from you.
What's your name, organization & position?
Al Zezulinski Founder & Chairman, Patient Account Management Systems, Trustee, Hospital of the University of Pennsylvania.
How did you land in the collections business?
I was at NCO Financial for many years. We were one of the largest debt collectors in the United States. When I first got there, my role was to pull together some acquisitions in the healthcare space. Later, I went on to work as a consulting accountant in the healthcare industry. I started working with distressed hospitals in the 90s. One thing I noticed was that in distressed situations, the first place hospitals lay off are in the non-patient-facing areas like business offices and housekeeping. I’d sometimes get in there and the business office would be a mess: the receivables had not been worked, etc. I remember one hospital where I found several millions of dollars’ worth of checks that had not been deposited because there was no one to post them! It was amazing.
At some point, I worked with the founder of NCO to sell the company to JP Morgan Chase in 2006. I stayed on with Chase until 2012. That year, I had an opportunity to speak at a conference in Brazil where I met Tatiana Pomar. She was working for a credit and collections agency in Brazil. She had just won an award for innovations in skip tracing using social media. This caught my attention. My office in São Paulo was across the hallway from hers, so I would stop in and got to know more about what she was doing. Her approach was to encourage what I’ll call “consumer-directed account management,” using social media.
Is “consumer-directed account management” fundamentally different from traditional collections?
Yes! A collection agency is typically a licensed entity that makes outbound phone calls and sends letters attempting to communicate with the right party to resolve a debt. Because of the changes that have occurred in communication, including consumer awareness, the rise of consumerism and just the way we behave socially, people don’t answer the phone anymore. They don’t open snail mail. The big problem we have in traditional collections is getting the right party on the phone.
Tatiana and I are essentially updating the way we connect with consumers. We’ve brought these ideas to the United States, and the interest has been very high. Potential clients are quick to see the relevance of our approach. We went live with our first client just this summer -- a very large debt buyer and bank based here in the US. They gave us 2 million accounts to put under management, and we’re about to sign our second client, who is poised to give us 700,000 accounts per month. So by the year’s end, we’re projected to have around 5 million accounts under management.
We’re using social media to give consumers the tools and opportunity to resolve their debt on an easy-to-use website that offers a wide range of options. Importantly, the relationship begins long before the debt has gone bad.
This sounds like a game changer.
We’re putting account resolution into the hands of consumers, and taking it out of the hands of the credit grantors, the banks, and the agencies that work for them. We’ve seen that people want to pay their bills. They just need to face it in their own way. Calling them when they don’t answer the phone doesn’t work. Making more phone calls just means more calls go unanswered.
Are you focused on the healthcare space?
We did start in healthcare because I came out of healthcare. At NCO, I had certainly worked on other kinds of accounts. As head of NCO Portfolio Management, we were the second- or third-largest consumer credit buyer in the US. We bought millions of accounts each year: utility accounts, healthcare accounts from large healthcare and physician groups and hospitals, plus credit card accounts, auto loans and so on.
The context of the patient-provider relationship seemed a perfect place to pilot this approach, especially given the rise of self-pay balances. I think the self-pay crisis is only getting bigger and worse. The average balance size is bigger. More and more consumers have HDHPs, and they aren’t responsive to traditional methods of collection. So it struck me: Why not put this in their hands, and let them manage their own self-pay balances. We can educate them, and give them the tools to come to us, and handle their outstanding balances on their own terms. We created a platform called PAM---which stands for Patient Account Management.
The same platform, branded Zeroing, is centered on credit cards, auto loans, student loans and utilities.
What’s the special sauce of this approach to collections?
Our approach is true to life. Reality is that people lose their jobs. Family income changes. Expenses don’t go down that fast. When someone can’t go to work because they’ve just been diagnosed with cancer, the impact on family income is profound. These are all lifecycle events that consumers need to manage through. Badgering them for money doesn’t help. It makes things worse.
I’m also on the board of a large Philadelphia hospital. I’ve seen that when a patient comes into the healthcare environment, we’re caring, we’re friendly, we call and check on them. They’re treated beautifully. They’re cared for. They’re respected. But then they owe us money, it’s as if they cross over a threshold and the relationship becomes increasingly hostile. That doesn’t make sense. In the healthcare community, if we live by the Hippocratic Oath’s central premise, “Do No Harm,” then we should do no harm in a patient’s financial life either, because it’s all one ecosystem. Financial pressures affect health.
In the healthcare space, in addition to caring for patients, there is also tremendous bottom line pressure. Offering a digital platform increases liquidity and lowers costs because it’s all digital. Also, something else happens that’s a byproduct, but in many ways is even more important to the bottom line: We can improve patient loyalty. In an era of increased competition, that has an impact.
What are the compliance implications of using social media to connect with consumers?
The largest data security and compliance risk is human beings. In our model, there is no human being. No one is writing down or making notes. We take the human element out. Our servers run on Amazon Web Services. It’s got more security than most military installations. It’s easy to maintain compliance the privacy guidelines. In terms of rules governing outreach, there are three kinds of patients we deal with. There are patients who are pre-registered to receive hospital services but they have not yet incurred the associated costs. At the beginning of the clinical relationship, we’re already involved. We’re gathering consent, and information, and modes of communication. Our goal is to build an ongoing, sustainable relationship with the consumer.
The second kind of patient has been in the hospital and has been discharged. Once the insurance company has been billed, we reach out. Again, we were there at the pre-admissions moment, gathering contact information and consent to use it. So once the bill comes back from insurance, we take the opportunity to explain the balance due after insurance has paid its portion.
As far as demographics go, about 15% of patients are Medicaid, or are indigent. They won’t have a deductible to pay at all. Another 25% will pay as soon as they know their self-pay balance. The remaining segment will need a payment plan. We suggest a payment plan based on the criteria and guidelines that our clients give us, and generate 5-8 viable payment plan choices. If none of those fit their lifestyle and family budget, the consumer can suggest one that will, and we try to get approval from our client. It’s all done digitally. The client might counteroffer, or they may just accept the consumer’s suggested payment plan.
How successful have you been with unresponsive consumers?
The third kind of patient has been discharged from the hospital, but has not responded to our outreach. Sometimes we have contact information and an email address and/or cell phone number, and permission to use it. If we have an email address and a cell phone number, we use those for ID purposes through our analytic platform. We can use Facebook, Google and other tools to ID upwards of 85% identification rate. We can find your name, tied to an IP address on a specific device. And we can put a banner ad in front of you that says something like: “If you’re concerned about past-due hospital debts, and how they can impact your ability to buy a new car or obtain housing, click here….” When they click through, we can show them their specific hospital debt, and get them to enroll into the program and deal with their debt.
Our hit rate in Brazil with this approach was insane in 2015. The largest bank in Brazil gave us a million accounts, and gave our local competitor the same number of accounts with similar characteristics. Our competitor put their million accounts into a traditional collections environment, and of course we used our collections environment. Four months later, we had collected 400% more cash than our competitor, at about 1/20th of the cost.
We’re not relying on consumers to come find us. We’re using technology to find consumers and making it easy for them to engage with us. We reach out, educate and motivate consumers through the entire arc of the patient lifecycle. We do it in English and Spanish!
How have physicians and hospital systems responded to what you’re offering?
Hospital collections is a traditional, call-center-bound business. I put it to the hospital C-suite this way: “Everything you give to an agency, give it to us at the same time. When we get a consumer to agree to pay our way, we’ll send you an update, and you can recall it from your agency. No need to change the way you’re working today.” It’s hard to argue with that approach because of course, hospitals have a fiduciary responsibility to look at the economics of all its vendors, but there is also the status quo to contend with. Change will be gradual, but there is no doubt that it’s coming. It’s unstoppable.