Matthew Holt: This is Matthew Holt with the Health Care Blog. This morning I’m talking with Bob Fisher. Bob is the founder, president, and CEO of Foresight Corporation, which is an Ohio based technology company that works primarily with health plans. I had the great fortune of being a speaker at Foresight’s recent customer meeting down in lovely Phoenix, Arizona, where I very much enjoyed meeting with Bob and the rest of his crew. It was really quite an interesting meeting because after I did my song and dance about the future of the health care system, the folks there really got into some of the nitty-gritty. It was almost a chance for Bob to pick his customers’ brains, I think, about what they’re seeing. He’s come back with a wide wealth of information, not only about what Foresight’s up to but also what some of America’s leading health plans are up to. So deep in the engine room, as it were. So, Bob, good morning, or I should say good afternoon to you.
Bob Fisher: Good afternoon, Matthew. I appreciate the opportunity.
Matthew: How are you doing? Have you been keeping well since the last time we were together only a few weeks back?
Bob: I came back with a head full of knowledge and a little bit of a tan, and today I have a head cold, but I’ll try and keep it out of the interview.
Matthew: So let’s start at the beginning. Foresight’s a pretty small company. You’ve been around since the very end of last century.
Bob: In 1990.
Matthew: Sorry. 1990? Boy, you’re a bit older than I remember.
Bob: Yeah, 17 years.
Matthew: Seventeen years. Actually you’re almost an old company in technology terms in that case. So, but for the average THCB reader, I suspect that you’re pretty much an unknown quantity. I mentioned you work with health plans. What do you guys do? What are your core missions, core business functions?
Bob: Matt, we work with health care organizations, providers, and especially payers as you mentioned, and we use technology to help them streamline their operations. That is in the areas of claims, payments, eligibility, that sort of thing. We call it transaction lifecycle management. Now, we have a decent chance of actually being known perhaps by some of The Health Care Blog readers because actually most large payers in the US today, including the majority of Blue Cross organizations, are using Foresight technology. They’re using it to reduce the claims rework, to assure accurate and timely payments, to provide any level of management reporting on an ad hoc basis, and to improve provider relations.
For example, at the recent Focal Point which you were kind enough to attend – and thank you for giving a very popular presentation there – at that Focal Point conference in Arizona, users of our Transaction Insight automation platform actually documented their success when they got into the, as you say, the nitty-gritty of it. They talked about how they were successful in reducing the time it takes to reconcile an error. When errors occur in claims, that is typically a 25 minute process to reconcile, and we’ve knocked it down to about five minutes. In the case of payments, it’s even more dramatic because a payment error can take up to four hours to reconcile. Again we’re back in the five to ten minute range. They also cited cases where we’ve reduced the calls into their call centers by 20 percent and increased the provider submission rate to 97 percent. So that’s the kind of efficiencies that they seek in us. It represents hundreds of thousands of dollars in savings every year.
Matthew: So give me a bit more of the background of Foresight the company. I understand the kind of issues you’re looking at for health plans. So what kind of skills and technology do you guys have that’s proprietary? And then I guess the second part of that is, what kinds of people within health plans are you working with primarily?
Bob: In our history, as you point out, we’ve been around for 17 years.
Matthew: Actually you pointed that out. I got that wrong. [laughs]
Bob: You gave me the opportunity to make that point, Matthew. We actually had developed a lot of technology in the broad-based area of electronic data interchange, where we had been very successful for many years, prior to the inception of the big HIPAA initiative a few years ago. It so happens that those HIPAA transactions between provider and payer were built on EDI. All of a sudden, as the mandate was approaching back in – well, we were in it in about 2000 – we were the first kids on our block that actually had the technology already in hand to look at a piece of data and say whether it was or was not HIPAA compliant. That proved to be a very popular capability and one that launched us quickly into the health care area and caused us ultimately to take it on as a major area of focus for us.To your second question of what kind of people we work with, the technology touches a lot of areas. For example, in the claims operations area those folks really appreciate the fact that we provide real-time dashboards with up-to-the-minute updates of transaction processing. They can see trends. They can see bottlenecks. They can see patterns from the content of those transactions. So it’s a kind of at-a-glance real-time capability. It’s very, very valuable, especially to the payer organizations. Now at the same time, other areas like provider relations. They promote our provider portal, and that allows hospitals, for example, to check the status of claims and payments in real-time. So we’re touching that area as well. We’ve also just rolled out in Transaction Insight, or TI, an enrollment manager application. That permits an accurate assimilation of new member enrollment. So we really do touch a lot of areas. The solutions are all about efficiency and the capture and use of information. They’re all designed and applied specifically for each enterprise. We work with every organization individually to figure out the just right application of the technology.
Matthew: So what do you think of the leading issues? So I’m buried within an administration piece or a claims piece, somewhere in a big health care organization, and obviously you guys are working with some of the real big guys like Wellpoint and Highmark and some of the real big players. You all see this data all the time about the huge cost of administration in health care. Obviously a lot of this has to do with people pushing around paper or having claims systems that aren’t easy to manage. I completely understand the concept of how do you get more agile software that makes this process easier. Some of these problems have been around for awhile, but what are the emerging issues for your customers within those health plans? If we could just fix this problem and use technology like yours or the next generation of technology like yours, our administration costs would go down. Our lives would get better. We’d be able to do more flexible things with our provider network or our customers. What do you think are the emerging issues for these folks?
Bob: Well, you actually did a good job putting your finger on some of it in that question because as you pointed out there, this was a paper-based world, wasn’t it? These folks came up in an industry that was all paper-based. While it’s evolving, there’s a key role to be played in accelerating that evolution, and I think that’s a key piece of what we do. The transition which includes the introduction of these HIPAA standards several years ago has been tough. This is some pretty jolting change for the industry. I think the payers especially… providers as well… The payers especially are now recognizing the need to embrace the automation, which allows them to react faster, because they need to be in a position to both initiate change and assimilate change. Much of that has to do with their processes. Some of that has to do with their own delivery model, and what type of products they are putting into the market.
Matthew: Let’s talk about that a bit. Most of the folks you’re working with have… they’ve always had a range of plans, and there’s always been huge variation in the benefits. Part of the issue has been, from the provider point of view…Funnily enough, the podcast I did earlier this morning was with Jonathan Bush, who is with AthenaHealth, who is working to sort out the other end of this. The provider end, creating claims and being a center where claims, and payment information, and other exchanges can go back and forth with the plans. They actually rate health plans, as you probably know, based on how well they function, how well they do this sort of things that you’re helping the health plans do. He’s probably creating work for you.
Bob: [laughs] In a roundabout way.
Matthew: We’re all seeing these new kinds of plans being added, with the whole issue of the consumer directed plans which have got all these bells and whistles attached to them. They may have a different payment structure. They usually have different deductibles. Is that creating a whole new stream of work for you?
Bob: A couple thoughts in there. One, I think it’s creating new opportunities. Before we leave the topic of the administrative, one challenge… the challenge of reducing administrative costs is not a minor one. It’s been estimated that up to 30 percent of all health care costs are administrative. Based on the fact that… Currently, health care in this country is currently running somewhere north of 17 percent of the GDP, that would suggest that the administrative aspect of it is somewhere between five and six percent of the US GDP. That’s $650 billion. Technology can do a lot here to make payers more efficient. It can also make it easier, leading into the second part of your question, for them to focus on developing new products which we, employers and members from the historic pricing models… You and I have talked about this before. The consumer has been, and I believe remains too far removed from the cost of the services used. It creates perverse incentives, including the overconsumption of health care services. That’s the macrotrend. Foresight helps streamline the payer’s operations as they improve their delivery model.
Matthew: Right. So, let’s touch on it. You just touched on some of the wider trends. Although we may end up with different solutions, we’re both conscious that people as health care consumers—Quote unquote. Patients, whatever you want to call them—are a) ignorant about how the system works, b) about what stuff costs, and c) about what care is needed and unneeded. It’s been always, for the last 10,000 years, a supply driven industry. You go to the doctor, and the doctor says you need this, that, or the other. What do you think that some of the things that you just raised imply for some of the wider issues concerning health plans? If you’ve got the need to put together a plan, you’re putting out a product which you’re dumping more responsibility on. I’ve heard it described as handing the keys to the car to the consumer and saying, "Go take it for a spin," but you’re not going to give them a steering wheel, or you’re not going to give them a dashboard showing how fast they’re going. What kind of things are health plans doing to help them with that issue, and what wider issues do you think that raises for where the business of a health plan, and consequently your business, is going to go?
Bob: Well, first of all, we give dashboards. [laughter]
Matthew: That was a softball. I’ll be struck off the responsible – I never was a responsible journalist – but I’ll be struck off the responsible journalist committee for now! Too easy.
Bob: Actually there are a lot of experiments underway right now that are very interesting I think, for high deductible plans on one end of the spectrum to these mini-medical plans for non-catastrophic coverage on the other. You hear people say, "Look, I know I cannot afford full fledged health care, but just give me something for basic ER, doctor’s visits, what have you." So there’s some good stuff being tried. States are experimenting with variations of universal coverage. Probably too early to say how those are going to come out. There’s some things that have to be overcome. Some states have imposed regulations that put additional requirements on how you must insure. It makes it harder to lend those things to national plans. It impedes competition. So there’s some legislative roadblocks that I think have been put in the way. The high deductible plans like the HSAs and the HRAs – clearly one intent of those things is to get the consumer closer to the actual cost. I think that’s essential to drive down costs. I think up until now the insurance companies have been fairly lonely in that they’ve been the only ones with a strong incentive to bring down costs. I think an informed consumer can do a lot to change that system, and I think the HSAs and the HRAs are the beginning of that.
Matthew: So if we take a premise – and I’m not sure I do – but let’s say we take the premise, and that insurers are now going to be figuring out how to create ways that are going to get people closer to the cost of care. There are probably two main areas. We’re seeing a lot of activity, if you like, around what I call the "cheap stuff," like the physician office visits. I think you told a story in Arizona about going to an office visit and trying to ask the doctor’s office what it cost, and like nobody having any idea, and then saying it was a ten buck co-pay or whatever you pay.
Bob: "What do you mean, what’s it cost?"
Matthew: If you go through the process, and funnily enough I was just in a meeting in Nashville with something called a Health Care Innovators Confab, which is just a bunch of guys who know about health care getting together and yakking about some of the issues. Interesting enough, one of the best, most fascinating presentations was someone at a re-insurance company, and he was talking about the high level of really, really high claims that health plans were facing. They were then punting over to the re-insurance community. The number of claims in excess of a million dollars in the last five years has gone up by a factor of nearly ten. It was incredible. We’re talking here about early birth weight babies and organ transplants and really, really expensive stuff like that. Obviously there’s work that needs to be done across the spectrum here, but let’s focus a bit on the consumer because the health plans that you’re working with are going to be dealing with these consumers. What kinds of things can they do to help that sort of consumer understand what does the office visit cost and get sort of attuned to that. And then let me bring it back to Foresight, where are you guys going to be playing in that, what kind of role are you going to be, is your technology going to be taking stuff out of the claims system to represent that to the consumers, what do you think you’re heading with that area. That’s a long question. Start at the beginning and go to the end somewhere. [laughs]
Bob Fisher: OK. Well, to the first part, I think information sharing – I think that should not be underrated. The ability to provide information… you know in the past, these claims that had been submitted by the providers, to all appearances, they’ve gone into a black hole and eventually sometimes they get paid, sometimes they get mispaid sometimes. It’s all quite mysterious. The ability to be able to give visibility to where these things are, to what has happened, to what the causes of rejection are, to what the trends are, if you are a lab that has or a hospital that has several billing areas, wouldn’t it be helpful to learn that many of the rejections are coming because of a coding problem always by this one area. And wouldn’t it be nice to learn this on a timely basis. So, as information can get passed back to the provider and, ultimately, to the consumer, I think the informed consumer and the informed provider can use those things, can take advantage of them.With regard to the second part, the future for Foresight, it’s clear that technology solution providers have a major role to play in fixing what ails health care. At Foresight, in particular, we’ve been extremely successful at providing an infrastructure needed for a truly paperless system. The Transaction Insight platform that I’ve been discussing permits these organizations to take advantage of that information sharing needed and it helps them manage their operations in an intelligent and insightful manner. So it’s timely information and it’s efficiency. We’ve been a leader in streamlining pre-adjudication processes, eligibility, checking, claims processing, payments and. We have an excellent track record and the secret, quite frankly, of our innovation has been, we listen very carefully and work very closely with our customers including our advisory board that we meet with, which are real, hand-picked customers we meet with in person at least a couple of times a year. So today we’re looking at ways to tie even more closely to other types of application systems to provide more intelligence and value from the increased access to this health care content. We intend to remain on the forefront of this transaction lifecycle management and enable more streamlined processing and more information sharing.
Matthew: Talking about that information sharing. Currently if I’m using an application, I’m going to be a sort of IT professional or some level of claims administrator or someone within a health plan. How much do you think the health plans are going to be opening up their systems so that consumers can look directly at their stuff. You think some of this goes on already, with, you know, look-ups of claims systems, but it’s still a pretty opaque black box there. How much of that do you think is you’re getting the appetite from their customers, saying, yeah, we’re going to show more and more of what’s behind the curtain? Then, how much is that going to be worked with you or is that going to be the domain of the WebMDs of the world? How is that going to play out in the business?
Bob: Sort of my folks went to a meeting at a group, a medical group in New York that was given access to and had been for some time, the portal, the provider portal, from one of our customers in that region of the country. They are all over it, all over looking at because that is the end of the black box, is the end of the no visibility into “what I have submitted, what is its status, what are the problems caused, what are the coding errors”, all of those things. I think providers will gobble this stuff up and I think it’s very much in the interest of payers to make it available to them. Because after all, it speeds up their processing as well.
Matthew: And is that something that you guys are directly involved in?
Matthew: And do you think the same thing is going to be happening for consumers, too?
Bob: I do. I do. These other initiatives with the electronic health record, and some of the work by the RHIOs that are out there – a lot of that goes back to the consumer and is a way of giving information back to the consumer. There’s several other steps before you have the fully informed consumer and the things that would happen that would enable the consumer to act a little bit closer to. You know, in a traditional market, you have the consumers of goods and the producers of those goods and there’s a buy and sell and there’s competition. We are so many light years removed from that in this industry right now. And every time you make more information accessible I think you get closer to that true competitive market model.
Matthew: So you have pretty much at this point been dealing with what you call administrative and financial information, and you’ve been talking about that. And at some point – and I guess the real reason that there is an issue around “can you generate a true consumer market in health care?” – is the big question about that is there has to be a marrying of the administrative information including things like process and outcomes from clinical record.
Matthew: Because at some point, and as you said, we are light years away from this, who knows if we’ll ever get there. We want try and put up the fact that not only is there a price but there is a value to something, you know what are you paying, what are you getting as your outcome?
Matthew: And I think, you know, you brought up a point, when you introduced me at the talk, you said there are couple of things wrong, these are wrong with health care, and one of them was that, you know, we are creating these very expensive drugs, which seems like everyone – not necessarily expensive drugs, but relatively expensive drugs — which you could define that everyone in the society should be on a lipid-lowering drug or everyone should need a particular type of anti-depressant or whatever—these things, you should put it in the water .We are running up some big costs there. Obviously the folks at the drug company world would argue, “well yeah, but this is saving money elsewhere and it is improving outcomes” and all the rest of it. And we don’t really have the measures of that. Are you hearing – when you talk with the health plan customers – are you hearing many people interested in how do we develop those measurements? It seems to me if we don’t get to that part of the equation and you are only ever talking about price, you are missing half the picture.
Bob: I certainly think we have a long ways to go and the problem… one question that’s fair to ask is: “Why is this different from anything else where there are market developments and innovation?” And sometimes they are expensive and they are out of the reach of the consumer. The difference is we don’t have an efficient pricing mechanism in this market because we have… again, the consumers are far removed from the pricing. And therefore the producers aren’t finding it necessary to cater to the consumers on a price-oriented manner. So there are larger problems to solve. But… you know, I look at the progress that has been made and look at the…I mean, I think these plans, these HSAs and the HRAs and that sort of thing, there’s something very right about the direction that they’re going in. If you go back historically, insurance was not to cover every little nit. It was originally designed for the major and the catastrophic, and the over-application of it has created, I think, problems. Frankly, some of these drugs are goodness, but they are stealing from health care dollars that would otherwise be used elsewhere, the reason that’s happening is because there’s not truly a consumer choice in the matter.
Matthew: Well we can argue back and forth about that. I’d say that for a number of drugs you can argue, “if we can account for the outcome later that you’re better off getting the diabetics on their program and taking their drugs” — it’s cheaper and probably just as good if it’s generic — rather than a branded one, we’re just hearing more about the branded today. But the issue is, we have to be able to account if they took those drugs, does it save expensive hospitalization for later, and all the rest of that? And there’s no good way of accounting for that.On the other hand, we do know that the reason we have health insurance in the first place, even if it’s for just the catastrophic stuff, is because most of the high costs go on a very small number of people. We know that most of the money gets spent on them… Although there is clearly room for more efficiency, and probably better judicious use of services at the "lower end." You know, the extra office visit and all the rest of that stuff. And there’s obviously a lot of lily-gilding by the providers in that area, and we know that’s still going on. But in the end, the real big money is spent on people who have maxxed out their deductible — the expensive 15, 10, 5, even two percent of the population. Do you sense that there is much appetite – I don’t know if this quite your area – but do you sense there’s much appetite within health plans to go look at those folks as well as to be looking at the management of those people and using technology for that, as well as for the more transactional – the lower cost transactions? Are you worried much about that or is that a bit far away from where you go?
Bob: Well it certainly is a ways away from the solutions Foresight’s providing every day. But like yourself, I’m always willing to venture an opinion. [laughter] I mean why is an HSA and an HRA – why are those appearing now? I think it is recognition of kind of getting back to the basics of what insurance was supposed to be about. That’s not to say it’s a comprehensive solution, but I think it’s a way from the idea of – whether you’re paying a $10 or $20 co-pay – it’s back to this is for the very small percentage that have the very large problems. I think that’s a good direction to head back in. I think it’s one of the things that will tend to make the system more affordable, along with giving greater visibility to the cost of the procedures and services.
Matthew: Yeah, and I think it’s — wherever you come out in this — the lack of visibility; a system level and a monthly level in people’s paychecks. A meeting I was at lost a couple of weeks back had a guy from American Standard. As he said, the people who make the widest known brand of after-dinner china, which I thought was rather witty. [laughs] They have a plant – I think it was in Georgia or Ohio or Wisconsin or somewhere – and he was showing the costs. Literally, the average employee in that plant was taking home less than $35,000 a year. The average individual health cost – not the family, the individual health cost for those employees, and these are not old people, they’re working people – was over $9,000. And you’re going: Does that person realize that their health care segment of their take-home pay is basically on the way to being a third, 25 to 30 percent, of their income? Nobody understands that. Nobody understands how much the system costs, and nobody understands how much it costs system wide. [laughs] So no wonder no one is alerted to the problem.
Bob: I agree. I have read that Starbucks spends more money on health care than they do on coffee.
Matthew: Here’s the nasty question for the CEO. [laughing] Do Foresight employees know how much their individual health care premiums cost? Not their contribution, but the whole amount?
Bob: Yeah, they have a pretty high awareness of this stuff. They are on one of the new modern plans. Because we are immersed in the field, I think our level of awareness is probably a little bit ahead of the curve.
Matthew: Just to wrap up, give me a sense of where Foresight is as a company now, what you think you’re going to be doing, whether you are looking for more rapid growth or whether you’re going to continue what you guys have been doing. Just give me a sense of where you are business-wise, how it’s going to play out, and what kind of things to expect from you in the future.
Bob: Sure! This is an exciting time for us, Matt. We’ve been experiencing rapid growth. We’re going deeper into the organizations that we work with – our long-standing customers – and providing deeper, more thorough solutions. We’re looking at ways of tying more closely to existing application systems, including business intelligent systems, adjudication systems, translation systems and the like. And to provide more intelligence and value from the access to the content in all of those systems and everything throughout the transaction life cycle. So that’s really the direction, is to keep on heading into more depth, more open information and more streamlining and efficiency for these health care organizations.
Matthew: Are you thinking about it in terms of extending…it sounds like you’re talking about extending to some other product lines. Is that more organic? Do you think you’re on the acquisition trail? Where do you see yourselves as a company in terms of the scale of your growth in coming years?
Bob: We’re always looking at a number of possibilities. What’s especially intriguing about the transaction inside platform is that it truly is a platform in the sense that you can add more and more applications. We’ve most recently added an NPI manager to help with the National Provider ID. An enrollment manager. We’re partnering with other companies including Bloodhound for clinical edits. There are a lot of things that can be added to this platform, and we’re a leader in streamlining pre-adjudication processes. The more that can be done sooner in the process and the more information that can be gleaned from it, the greater the value. So that’s where we’ve been playing and that’s where we see our growth for at least the next several years.
Matthew: That’s good stuff. Great! Well I’ve been talking with Bob Fisher. He’s the founder, president and CEO of Foresight Corporation, who is as I mentioned had a very nice retreat down in the Phoenix area earlier late last month. I was very lucky to be invited along. I spent a nice time talking to the folks there and also hanging out by the pool. [laughs] So generally a very nice time was had by all. Bob, it’s been exciting hearing about Foresight and their thoughts about the health care system, so thanks for spending some time with me this morning.
Bob: Thank you, Matt. I appreciate the opportunity.