There’s no question that healthcare providers are among the hardest hit by Covid-19. Even as their work is more important than ever, many providers are hanging by a thread. Revenue from elective procedures still lags behind pre-pandemic levels, and the American Hospital Association (AHA) predicts hospitals will lose a total of $323 billion this year. Soberingly, these losses put 40% of providers at risk of closure.
Revenue losses from elective procedures aren’t the only source of financial strain on providers. In 2018, hospitals provided an average of $12.8 million in net care charges that went uncompensated. Hardest hit were smaller, rural hospitals, for whom uncompensated care expenses represented 8.3% of their operating expenses. These same rural hospitals were particularly vulnerable to closure even before the pandemic when 25% were on the brink of bankruptcy. In some states, over 60% of rural hospitals are at high risk of closing.
Unfortunately, the problem of uncompensated care will only get worse as the pandemic progresses and its economic toll worsens. In the first half of 2020, 43% of Americans were uninsured, had gaps in their insurance, or were unable to afford their out-of-pocket costs and deductibles. By the end of year, 10 million Americans could lose their health insurance due to pandemic-related job losses, adding to hospitals’ uncompensated care woes.
Fortunately, many newly uninsured or underinsured Americans qualify for Medicaid or other benefits. As of August, 39 states have adopted Medicaid expansion. However, many uninsured individuals may not know they qualify for Medicaid, or may have neglected to enroll or find new insurance amidst the chaos of the pandemic. But if these patients wind up in the hospital without the means to pay for their care, the hospital will, in all likelihood, be footing the bill.
There are downstream costs of uncompensated care as well. When patients are unable to afford their care, they are more likely to skip important preventive care visits or stop taking life-saving medications, ultimately worsening their outcomes. Under value-based care models, providers will face financial penalties for these worsening outcomes — at a time when they can least afford it.
Amidst the financial headwinds of 2020, most hospitals can’t afford to sit idly by and hope their patients independently enroll in Medicaid, an affordable ACA plan or a financial assistance program. To prevent uncompensated care, providers need to proactively find patients who may need care they can’t afford, and help them find a way to pay for their care before they need it.
Of course, that’s easier said than done, especially as many providers have been forced to layoff staff that could be working to find vulnerable patients without the means to pay for their care. Faced with staffing constraints, providers will need to be efficient with their resources if they are to prevent a surge of uncompensated care.
Fortunately, this is where data science and prescriptive artificial intelligence (AI) can assist.
AI: The Antidote for Uncompensated Care
Prescriptive clinical AI is a powerful tool that can help providers prevent uncompensated care by identifying patients likely to need significant care, seek that care from their specific facility, and lack the means to cover the costs. The clinical and financial insights help providers address the needs of their patient population more holistically and proactively. It presents an opportunity to reach out and counsel patients on their options for affordable care, whether that be Medicaid enrollment, a low-cost plan from an ACA exchange, or a financial assistance program — all before the provider is put in the position of sending a bill that will go unpaid.
Prescriptive analytics go beyond traditional predictive analytics, adding value by identifying the people on the cusp of being high-risk, not just those with known risks, and then prioritizing actions to mitigate the risk. Clinical AI does this by analyzing thousands of data points per patient and comparing them with a database of millions of other patients, AI can predict patient risk that would otherwise be invisible to providers. The more data is processed by the AI, the more accurately it can predict which patients are likely to deteriorate or require hospitalization.
Although many data analytics tools are based only on clinical data from electronic health records, socioeconomic data should not be overlooked, as it can be a powerful predictor of patient risk. In fact, a study published this year in the American Journal for Managed Care found that AI trained on socioeconomic determinants of health (SDOH) data alone can accurately predict inpatient and emergency department utilization.
This socioeconomic context is critical to predicting which patients are likely to contribute to uncompensated care. Not only can it help predict which patients are likely to need costly care in the next six months, but it can also predict which patients may lack the means to pay for their care. Proactively helping these patients enroll in Medicaid, financial assistance, or an affordable health plan can prevent their care from going uncompensated.
Medicaid can be a powerful tool for stopping uncompensated care. In states where Medicaid expanded, uncompensated care decreased. If used to its fullest extent, Medicaid can help vulnerable patients afford care while preventing providers from losing the revenue they need to stay afloat. However, nothing is perfect, and not all patients eligible for Medicaid are aware of it.
Clinical AI can be the guiding hand for those who would benefit from Medicaid or an affordable care plan, helping providers identify which patients should be enrolled. AI is estimated to save healthcare $18 billion by 2026, and disrupting uncompensated care is just one way it will do so.
By helping patients find affordable healthcare, AI will promote stronger financial health for providers and patients alike, and improve the quality of care as patients gain the financial support to engage in more preventive healthcare. And with the twin inflection points of value-based care and pandemic-related financial losses bearing down on providers, it couldn’t come at a better time.
Photo: mrspopman, Getty Images
