Hi, everyone. This is Lucas Voss with the
Becker's Healthcare Podcast. Thanks so much for joining
us today. We have a very exciting topic
and, more importantly,
a very exciting
guest. I'm very thrilled to be joined by
John Espens, VP Strategy at Cerus,
who will talk to us about trade offs
of outsourcing versus internalizing payment integrity solutions. It's
almost like a philosophical
discussion, I feel like, John. Thanks for being
here today.
Thank you for having me.
Absolutely. If you could give us just a
brief introduction to yourself and sort of your
overview of your work in in health care
for the audience.
Sure. Happy to. Well, as you said, my
name is Jona Spence, vice president of strategy
here at Cirrus Health. Maybe a little bit
on Cirrus First. So Cirrus offers a number
of payment integrity solutions to our health care
payer partners,
ensuring, obviously, that claims are paid accurately and
saving them money.
As far as my background,
I would say, like most people in the
industry, I didn't plan to go into health
care Mhmm. But rather it kinda found me.
I started out,
actually right out of college performing
collections on behalf of hospitals,
but it gave me an interesting perspective of
hospital billing. And then I quickly moved over
to the insurance side of the industry,
where I've held a number of different roles,
hospital negotiations
to client management,
to today in my current role of, vice
president strategy where I act as member of
the executive leadership team, ensuring our strategy closely
aligns with that of, the needs of our
clients, and then, of course, addressing any market
changes.
And you mentioned the most important part, saving
people money. Right?
Yes. Always. Yeah. That's the the key piece.
Well, for us to dive into this, I
think we have to set the stage a
little bit for where we are today and
and what everything looks like from your perspective.
So I I wanted to start with that.
For for payers,
what are some of the benefits and and
drawbacks
to insourcing right? And then also, what are
the main factors
that really tend to influence health plan leaders'
decisions to insource to go that route or
not if they choose to?
Thanks. Yeah. I might start with a few
benefits
to in sourcing first. Yeah. Absolutely.
Yeah. So maybe starting off with probably the
most obvious benefit being the ability to have
just complete control of the program operations.
So as a payer, you know, the vendor
partner really should be an extension of their
internal program,
but the reality is they're giving up some
level of control when they in source or
outsource rather.
We see it from time to time where
a policy changes or even a a payer's
philosophy
around PI changes,
and they just need to make a change
very quickly,
you know, in how they're doing things. So
for example, a payer may need to go
from being less provider centric to very provider
centric,
maybe to help with a star rating or,
you know, contracting efforts.
But in a fully in sourced program allows
them to make those changes
very quickly
so that they can satisfy their own company,
strategy.
Another benefit to insourcing, I would say, is
consistency.
We've seen some payers in the industry split
up their payment integrity services,
between multiple
vendor partners,
and it ends up causing differences
in their work product.
And, eventually, it causes confusion among their provider
community.
Mhmm. So an in source program,
the payer knows what's going out their door.
It's consistent,
and then in turn, it cuts down on
the provider noise. And that's that's the goal
of any good PI program is gonna make
sure that our provider community is happy.
Now, of course, on the other hand, I
would argue the drawbacks
of a program that's a 100% insourced considerably
outweigh those of the the benefits.
Mhmm. Maybe a little biased.
One draw drawback probably being the cost of
the program.
The reality is vendors can, you know, offer
these services much cheaper than payers,
you know, when they do, you know, try
to perform these themselves internally.
It's just been proven time and time again,
vendors drive a much higher ROI
than building that internally.
Mhmm. So if you think about building out
a full PI program, you need to really
have knowledge and expertise,
and those people don't come cheap.
But even then, the cost of staffing a
PI program is more than just, you know,
a person's salary or even the one and
a half times the person's salary as we
kinda calculate
the cost of employing someone.
Now there are tools and resources
that those employees will need for that program.
And a vendor partner already has those in
place. They have the experienced staff and or
tools in place that you'll need,
to stand up a program.
And that's that's a big benefit too, I
think, being able to have Yeah. In house.
Yeah.
Yeah. Well and then real the reality is
what they're doing is they're spreading the cost
of that knowledge across multiple payers. Mhmm. So
you you're able to spread the cost with
essentially your competition.
And then I would say I'll touch on
just one other, you know, drawback,
probably the largest drawback, and that is,
you know, definitely worth mentioning, and that is
the loss of knowledge. You
know,
you lose, I'll say, the entrepreneurship,
when you in source a program.
So I've personally seen partners who completely in
sourced their PI programs
that just a few short years later have
come back to the market looking to reengage
with vendors again.
And it it's not because they aren't finding
savings. Right? But because they recognize that they
aren't finding anything new.
So things change rapidly in our industry. We
all know that,
and ventures are eager to innovate. Right? They
have to go out and find the next
big thing to remain competitive. Yeah. You have
to provide that innovation to be able to
say, hey. We we need that next step.
What's next here?
Exactly. And how do we do that? We
do that through collaboration.
But you're not gonna go collaborate with
your your competition. Right? You're not gonna call
it Exactly.
Yeah. Aetna's not gonna call United, we'll say,
and say, hey. What are you doing? So
vendors are able to provide that collaboration across
the industry
with you know, and doing it delicately without
kinda sharing any trade secrets.
So Yeah. And, again, maybe a little,
biased in this regard, but in sourcing just
unintentionally
creates a lack of innovation.
Yeah. It's very interesting. I didn't think about
that, and that's certainly something that's that's a
sort of an added an added factor that
people should be thinking about as well. And
one of the things I think that that's
very interesting that you've you've mentioned a a
couple of times here
in our intro question was the fact that
that control is control of operations is such
a big piece of this conversation.
Being able to control the process, being able
to control the insourcing approach, how does this
added control provide more flexibility
in responding to market changes, and how does
it ultimately impact cost, which is the most
important piece?
Yeah. No. You nailed it on the head.
Right? The importance of control comes down to
costs.
You know, let's say a concept you've you
know, a payer has implemented is wrong or
it receives a lot of pushback from provider
community.
You know, correcting that mistake can be very
costly if you don't act quickly.
So and, obviously, there's a an administrative cost
associated with overturning a concept.
You know? Ideally, you have a vendor partner
who you could trust, you know, to do
it right the first time, but you don't
wanna be touching a claim more than once.
And so if something like that happens,
when you have complete control,
you can act quickly
and fix it to cut down on cost
as much as possible. And that's just, you
know, one example.
Yeah. You're able to to react quickly,
react to change, being able to do that
and and have that added control. I think
that that's really key,
to be able to to create that that
flexibility
too, for for an organization.
And along those lines and I know we've
we've touched on this a little bit too.
This space is constantly evolving. There is constant
innovation like you've said. Right? We need to
be able to do that to be able
to move forward,
regulatory,
technology,
the market. Right? The market changes. Those things
are are key components.
What are some of the things that you're
watching today that are important to you,
and what are what's your advice for health
plan leaders that really want to maximize this
process of of insourcing
in the environment that we're in today?
Yeah. No. It can be difficult to keep
up with all of the changes in the
industry.
You know, if insourcing is something that a
payer is passionate about, I think staying in
front of conferences
is always a good way to do that.
Again, I think this is where a a
vendor partner can be a big help.
Sirus, we partner with different law firms and
entities that help us kinda stay
abreast of what's happening and changing.
Of course, the biggest trend we're probably all
of us are watching right now is the
transition
of government oversight in health care Yeah. After
the election.
You know, it's safe to say we all
expect to see a change in priorities of
CMS, especially,
and potentially some new legislation because of it.
You know, we can make assumptions on where
we think those priorities will lie in the
future,
but,
I'll maybe save those for another day. But,
you know, as a payer community,
yeah, we just we need to be intentional.
And, again, I think collaboration is key,
just to ensure that we are consistent in
our application
in the industry as a whole
and as
a payer community.
And then another one I'd say, which is
still worth calling out, you know, we've seen
a few things come out of the last
big security hack in our industry,
but I do expect there will be a
a lot more regulatory changes to come out
of that unfortunate situation.
So we continue to watch that one closely
as well,
to just kinda see what the impact will
be as we expect some more security
requirements and things come out of that.
I think, personally, I think we already have
our next episode, Janna. I think that that
that should be it. That should be the
next episode. I think that's a great topic
to discuss in terms of what what's next
for for this space.
Yeah. So much so much to discuss.
So many things that that we've mentioned here
have implications for for a ton of organizations.
John, I wanna just leave you and give
you some time if there's anything else that
you wanna mention that we didn't touch on
that that might be important for folks that
are listening today,
for for their own, operations or in general,
their own interest. Is there anything else that
you'd you'd like to mention?
No. Not really. I'd just say, you know,
one, thank you for having me. And then,
of course, I'm always happy to make myself
available.
Collaboration and consulting is what Cirrus is known
for, but it's something I'm also personally passionate
about. So if anyone in the industry,
feels the need to reach out, please do.
I always welcome any dialogue and open to
just talking about what makes sense in the
industry.
And we talked about partnerships. It's important to
engage vendors for innovation.
It's important to talk about talk about, talk
about innovation, talk about, talk about these things
with partners that that you can trust. I
think that's really key to drive innovation. Janna,
thanks so much for your time today and
and for the great discussion. This was awesome.
Thank you.
And I'd also like to thank Sarah's for
sponsoring this episode today. You can tune in
to more podcasts from Becker's Healthcare by visiting
our podcast page at beckershospitalreview.com.