Patients are in crisis. The rise in popularity of high-deductible health plans has driven a dramatic increase in patient out-of-pocket expenses. It’s estimated that in 2021, patients were responsible for almost $500 billion in out-of-pocket healthcare spending and this number is expected to grow to $800 billion over the next 5 years (9.9% growth rate). In fact, medical issues are cited as the primary reason for personal bankruptcies in the U.S. (accounting for ~350,000 bankruptcies annually).
Despite this growing consumer financial burden, The Affordable Care Act, coupled with payment innovations and data analytics, have meaningfully reduced the amount of medical debt outstanding over the past 10 years.
However, continued improvement can only be realized through additional innovations in the patient’s financial experience and their financial literacy. Accenture estimates that the costs of low healthcare system literacy costs the system $10 billion annually.
Financial planning solution for patients
Financial planning is the process of taking a comprehensive look at your financial situation and building a specific financial plan to reach your goals. Being able to pay for medical costs now and into the future is the goal of every chronically ill patient. Through our extensive discussions with patients we have learned that the unknown financial consequences of diagnosis is their #1 concern. Once these future costs are better defined it becomes easier to develop a plan to meet this goal (and reduce financial anxiety). However, forecasting future costs has many variables that has hindered the ability to develop these models, namely:
- Changing health insurance regulations and plans;
- New treatments effect of disease progression;
- Outcome variation between rural and urban patients;
- Ability of the patient to maintain employment;
- Need of a loved one to leave the workforce to become a caregiver.
Given well characterized health data this problem can be solved and the costs of doing so are decreasing every day. Iryss’ primary mission is to develop disease-specific financial projections for patients. We believe advances in data curation and machine learning will help us effectively and efficiently create predictive models for out-of-pocket medical costs.
Optimize the payment of patient medical bills
Medical bills, especially those associated with a chronic illness, are a major cause of financial anxiety. There are two main problems with medical billing:
- Medical bills are overly complex: 70% of patients are confused by their medical bills. This drives 37% of patients to not pay their bill, because they believe their insurance company will pay it. Consumer friendly payment technologies have been launched recently to help solve this problem. While modern payment technologies can improve efficiency, they do not solve the larger problem which is low healthcare financial literacy.
- Household financial context: There are several resources to help patients reduce the financial burden of a diagnosis. Over 20,000 financial assistance programs are available and pay over $30 billion annually to help patients with medical bills and/or essential items. Determining eligibility and applying for these programs is confusing, unless you are working with a large healthcare institution using sophisticated matching software. Additionally, there are dozens of medical debt lenders, but identifying predatory lending practices is difficult for the consumer.
Patients should be able to efficiently pay for bills from the source that best meets their short- and long-term needs. In our opinion, current solutions are more provider-centric as they improve collection rates, but they don’t evaluate the patient’s financial situation to ensure that their best interests are met. Additionally, today’s patient billing creates a reactionary response (buy now, pay later), as the financial burden is only realized post-procedure/treatment. Using Iryss’ cost projections, patients can begin planning ahead for bills (save now, pay later), so that they are better prepared to meet their healthcare financial obligations!
Curate a partner ecosystem that protects patient wealth
Chronic illnesses have a long lasting effect on household finances. They can lead to lost wages for the patient and loved ones and, at the end-of-life, increase the need for home health aids and/or assisted living services. So, what value-added services can our future partners deliver?
- Insurance: Protect your families income stream;
- Estate planning: Ensure your intentions are documented;
- Account management: Make sure you are money is working for you
By developing a solid plan, streamlining the out-of-pocket cost burden, and ensuring long-term household finances are protected, we will fundamentally improve the financial well-being of our users and by extension improve the healthcare systems financial stability. Because a financially healthy patient means a more prosperous system!
So, in short, our strategy is to:
- Sell software, using a subscription model, to help chronically ill patients plan for their future healthcare costs;
- Use that money to help patients more cost effectively pay for their medical bills; and
- Develop a trusted partner ecosystem that ensures that household wealth is not jeopardized due to a chronic illness diagnosis
As a result, we expect to meaningfully reduce the dollar amount of medical debt outstanding and the number of personal bankruptcies that are caused by medical issues.