Wednesday, September 26, 2007

D2B: Pay By Touch Has it Down to the "T"

Here is a brief insight, (okay, maybe not so brief) into Pay By Touch's Healthcare Solutions division. This industry has, by far the highest penetration of biometrics thus far, and holds a lot of promise for PBT. But it is a technical subject, so I'll attempt to lighten it up with analogies and such.

Before I start, I thought it might be valuable to give an overview of the industry as a whole before I delve into why Pay By Touch has an inherent advantage in this industry based on both their biometric platform and transactional capabilities. First, let's give a backgrounder on the industry as a whole:

In this industry, healthcare providers find themselves in a highly competitive and regulated environment. Managed care payers often demand deep discounts on fees from healthcare providers as a condition of directing their insureds to the healthcare providers’ respective practices or hospitals. Additionally, the federally funded Medicare and Medicaid programs are continually looking for ways to cut costs via reduced reimbursements to healthcare providers.

These pressures to reduce or discount charges, coupled with forces that are driving up operating expenses (such as the need to adopt new technologies to stay competitive), the increasingly high cost of pharmaceuticals and costs incidental to the chronic nursing shortage, create a pressing need for healthcare providers to collect every dollar owed.

In response, virtually all healthcare providers actively look for ways to improve the cost effectiveness of their non-patient care operations, including receivables operations. Receivables is an arena that Pay By Touch has focused on. An ounce of prevention is worth a pound of cure. Can PBT be the Wizard of .OZ?

One way to achieve greater cost effectiveness in receivables management is to partner with companies that specialize in billing and collections. Pay By Touch invested in sophisticated technology and employs highly trained personnel, allowing them to function as an extension of the healthcare providers’ accounts management department. This partnership allows the healthcare provider to remain financially viable while staying focused on their core competencies and ultimate mission of providing quality patient care. PBT can do the rest.

Let's get "Hip" as to why PBT identified and entered this payments/solution niche to begin with : We'll start with "HIPPA"

  • HIPPA is the Health Insurance Portability and Accountability Act, instituted in 1996. • Under HIPAA, healthcare billing or collection companies - if engaged in certain medical billing activities - may meet the definitional requirements for “healthcare clearinghouses” and as such are “covered entities” under HIPAA. If classified as “healthcare clearinghouses,” these companies would not only be regulated by the FTC but would also be subject to the regulatory jurisdiction of the Department of Health and Human Services and would need to assure their own direct compliance with HIPAA. Pay By Touch is in full compliance.
  • As “business associates” of healthcare organizations, healthcare billing and collection companies are bound to use and disclose consumers’ health information in the same manner as healthcare providers would, consistent with HIPAA’s Privacy Rule – and to assure the integrity, confidentiality and availability of that information consistent with HIPAA’s security regulations. Once again, Pay By Touch is in full compliance as a business associate of healthcare organizations.

Now it's "me time"...that sarcastic moment that keep me amused doing this blog:
I recently visited a new physician for an annual check–up and found myself amused by the HIPAA privacy compliance process.

I was given a one-page document informing me of my rights and my healthcare providers obligations regarding the privacy of my medical records.

This appeared to be nothing more than a bureau-speak version of the one line agreement that had always been included at the bottom of any medical personal information form requesting approval for the transfer of medical records between past and future practitioners and insurance companies.

All the HIPAA privacy mania seemed rather overblown as I watched the receptionist photocopy my insurance card then enter some basic personal data into the easily accessible PC on her desk.

Paper copies of the insurance card along with the rest of my medical history would then be
retained in one of the open filing cabinets surrounding her in the reception area. Wow. Thank heavens for HIPAA.

Now I really feel like my healthcare records are safe and secure!

Sarcasm aside, day-to-day operations for most healthcare practitioners have not really changed as HIPAA has gone live. Although that one-page form I signed will now have to be faxed to my previous healthcare provider before they can forward my medical records.

Most small physician practices- that have at most closed local networks - will be similarly unaffected. The true complexity and challenge of HIPAA comes into play with larger provider and payer organizations where data is stored and accessed across larger private and public electronic networks.

Subsequently, it has been these larger organizations where Pay By Touch has focused their efforts to secure access to facilities and patient records one organization at a time. This approach is representative of how Pay By Touch views their opportunities within all verticals; point solutions that bridge physical and logical security within a single facility. In the healthcare arena, HIPAA has been the leverage point that has opened the doors for this opportunity.

And while this open door is a genuine opportunity and patient privacy is certainly not a trivial issue, in many ways HIPAA is a distraction from the broader business opportunity at hand. The larger opportunity lies with consideration of overall healthcare market dynamics and how biometrics fit into more comprehensive healthcare IT trends. Two of the most significant and seemingly incongruent drivers are patient safety and cost reduction. The business of healthcare is providing safe, reliable, affordable patient care (in the private sector add profitable). IT projects that address healthcare’s primary business concerns will be more quickly and enthusiastically accepted and adopted. Technology based solutions that also increase convenience for caregivers, patients and payer organizations may even be met with outright enthusiasm.

This is the healthcare power play for biometrics. Rather than focus on linking physical and logical security, focus on linking patient safety and cost reduction through increased operational efficiency and convenience.

D2B? Indubitably!

There are three distinct reasons a healthcare provider may choose to partner with a billing and collection company. For the sake of playing with letters, and setting me up to play with words, "Let's call them the DEST", an acronym for Documentation, Economies of Scale and Technology.


A billing and collection company may be able to document more cost effectively the progress made handling unresolved patient accounts, interactions with payers, and determinations of uncollectability through regular reports and similar materials.

Economies of

A billing and collection company may have a broad base of experience working with various third-party payers on behalf of multiple healthcare providers, allowing the agency to keep current with any unique procedures such payers may have for submitting or resolving claims. This allows healthcare providers to focus on patient care functions.


A billing and collection company may have more robust billing, insurance follow up, patient accounting, patient history or other information systems. For example, billing and collection companies handling medical billing may perform clearinghouse functions or may have more up to date electronic systems for processing transactions in accordance with HIPAA or other applicable standards for electronic transactions. Billing and collection companies may also have different available resources, allowing them to generate large volumes of correspondence, report limited credit information, analyze credit information, verify insurance information, and interact electronically with third-party payers.


With that said, let's look specifically at what Pay By Touch brings to the table and why (here comes my play with words) I believe they are DEST'ined 2B the BEST product in this vertical.

Consider that Pay By Touch is in a position to "enhance the compliance" of HIPPA's Privacy Rule by replacing existing Documentation (paper and files) with a patented and more secure Biometric Access Technology.

There would be layers of security;
  • the receptionist would have access to low level documentation (better than that open filing cabinet or easily accessible PC)
  • whereby a nurse, would have biometric access to certain medium level documentation,
  • a doctor would have access to a higher level of documentation,
  • with full documentation available only to those with higher and approved level of clearance.
Thus if I change the D in documentation to a B for biometrics, the acronym morphs from the DEST (with PBT's pro-grammatical enhancements), into the BEST.

Now were even more HIPPA. To be clear, Pay By Touch is NOT the only biometric Technology company in the healthcare industry. There are quite a few players actually. So does that mean that others can also eventually morph from DEST into the BEST you say? In theory, yes. Biometrics make the process better, and Pay By Touch doesn't own patents on Biometric Identification outside of Payments, so there will be competition. But this is good, the more competition, the merrier. The more players there are in an industry, the more the marketplace gets inspired.

I understand processing and I understand competition. I've been involved in both a while. (competition longer) Truth is, without competition, one tends to rest on their laurels or just get by. So I say, bring on the competition, and, as always, may the best of the best win.

Competition breeds success, as it conspires to bring out the motivation in the players. When the best players play the game, the game itself improves and becomes better. Suddenly there becomes an increase in the draw or interest of those, who were previously, non-participators/non-players.

When people realize how the game works, how it is fundamentally played, (i.e. that biometrics are an exponentially better alternative than open file cabinets, or easily accessible PC's) then the better the industry or sector's understanding of the the benefits of participating in the game itself...the more they will want to come out to the park. I seem to remember something about "Build it and they will come"

At it's core level, that's what branding is, that's what marketing is. (Yes, I was joking before when I said "Branding is for Cows.") Surely I understand there's another breed (besides cows) of branding/marketing strategies. For instance: I understand that people may not like blowing their nose, but if you gotta do it, you gotta do it, and when they do, they use Kleenex. It's not "tissues" it is Kleenex. This is what Kimberly-Clark understood decades ago. (by the way, aren't you glad I didn't use Charmin in this example?)

HIPPA is not unlike having to blow your nose. It's a requirement now. They gotta do it, so they're gonna do it....and that's why it's gonna happen. How do we take an unpleasant experience, and make it easy. Make the Sneeze a Breeze.

Healthcare’s shortcomings with regard to IT adoption are well documented. Talk to just about any authority on the subject and they’ll tell you that the industry:

• Is still overly reliant on paper documents...
• Has far too many archaic legacy systems in charge of running applications...
• Doesn’t do enough to push recalcitrant physicians toward automation...

While these assertions may be true, healthcare also holds a distinction no other industry can boast – it is the largest user of fingerprint scanning technology for identification and authentication purposes.

Another words, because of the existence of competition, more people are aware of the game and thus, the benefits it provides, therefore non-participants have become players. At least that’s the finding of Robert Seliger, CEO of Andover, Mass. -based Sentillion. The most extensive use of biometrics is by healthcare,” he said. “We have as many as 15,000 users for one customer and have 45,000 to 50,000 caregivers using fingerprint technology on a regular basis. You won’t see that anywhere else.”

While the financial, military and security sectors are also heavy users of biometrics, Seliger contends that healthcare is at the top with regard to fingerprint scanning systems. So does Charles DeWitt, vice president of vertical markets for Chelmsford, Mass. -based Kronos. “It’s one of the highest, if not the highest,” he said. “We have approximately 4,000 healthcare customers and it represents 30 percent of our revenues.”

So what is it about biometrics that is driving such an impressive adoption rate? Gregg Malkary, managing director and founder of Menlo Park, Calif. -based Spyglass Consulting Group, says it’s a combination of factors. “Healthcare organizations are focused on patient safety, privacy and cost reduction,” he said. “HIPAA compliance, security issues, JCHAO auditing requirements and the push toward electronic medical records are all motivating factors. What’s more, greater penetration in other markets, such as national security, border patrol, financial payments and transportation is driving the price points down, making it more affordable for healthcare.”

So, ironically, (not) in a vertical that Pay By Touch "doesn't own," (unlike the biometric payments industry, after having bought out their only rival) ...competition, has naturally, created further inroads. Now that the path has been beaten down, Pay By Touch realizes that it is, in fact, one of the paths of least resistance. So let us visit how Pay By Touch Healthcare Solutions becomes a product that is hard to resist...


Can Pay By Touch become to the HIPPA Act what Kleenex was to the nose. Who knows...but this much I can state unequivocally: People Sneeze...

In order to offer the BEST platform, Pay By Touch would have had to improve on economies of scale. Wonderfully, and to their "credit" they have already done so. Once the healthcare industry begins to understand the intricacies of the game better, they naturally will clearly see who the best players in the game are. What makes one player better than another is being "able to do it all". Make contact, hit for power, have a strong arm, speed, fielding, etc. They are the ones that get the biggest contracts in sports, and business and sports have a lot in common. So what would make Pay By Touch Alfonso Soriano? Or A-Rod?


What features about Pay By Touch Healthcare Solutions STAND OUT from the other biometric healthcare platforms? What do they bring to the ballpark that empowers them to be the power hitter...the "all-around player, an all-star? I do believe that they've got it down to the fact, I can further identify it...down to the "T"

Pay By Touch is the "ONLY company" in this vertical who has "in house" capability to process Transactions.

This forte, is a "walk off home-run" capability. It is a very important faculty of the skills that provide PBT with MVP or "Fonzie Soriano" status in this game. They can process either HSA (Health Savings Accounts) or FSA (Flexible Spending Account) debit and check transactions, in-house, as well as a myriad of other types of payments.

Moreover, they are the only company that will
EVER have the ability and wherewithal to hit the "game-ending" homer because they have already "tied in" both a biometric health care solution along with "their proprietary" biometric payment solution. Better yet, both are also completely integrated and turn-key. So, essentially, PBT is the only provider of a system whereby everything can be biometric from start to finish, with one swing of the bat... they can run past first and continue on, straight to home" (Who Cares Who's On First, when PBT can be home- free)

Of course, for any transaction that, for whatever reason, is required to be done the old fashioned way, (i.e. using cards) Pay By Touch, processes over $18 BILLION dollars annually for over 140,000 businesses nationwide. (i.e. a prominent player.)

I've been in the processing
game a long-time and believe me when I say that being able to "Process" the Transactions, as opposed to needing to outsource it to a third party provider, results in a hugely competitive advantage! It's their HIPPA Hurricane Holler!

Remember the post titled "Pay By Touch, Much More Than a Biometric Payments Company?." Well, I "purposefully" focused on the fact that they are one of 11 True Processors. I didn't mention it at the time but they are also set up to be a Healthcare Solutions Processor to boot. The fact that PBT focused on acquiring payments companies like Intercept, Cardsystems, Paynet's portfolio, etc. was done with a purpose in mind. It has now evolved into a vastly distinct exception providing "very compelling eminence" over like companies in this vertical. There is no requirement for a Third Party Processor. PBT can...and all. There are no requirements "to integrate systems-into-systems" It's already done. PBT is truly a one-stop shop!

The end result is Better "Economies of Scale

In their words, from the Pay By Touch Healthcare Solutions Brochure: (as always, click the pictures to enlarge)

"The Pay By Touch healthcare solution is the only platform to offer an integrated, end-to-end solution that enables easy, friendly and cost-effective POS collections".

The Pay By Touch™ integrated end-to-end healthcare solution links all of the necessary applications to determine, collect and process patient payments. Our solution enables you to determine the amount due for service and collect from the patient at pre-registration or at the point-of-service (POS) — so you have less to bill later.

Pay By Touch offers a complete set of payment processing services in one integrated and flexible platform.

The platform accepts all forms of payment, enables special payment programs, executes payments on any standard hardware platform and enables biometric authentication for patients and their payment types.

Thus, Pay By Touch has it down to the "T" and my viewpoint is what provides them with the BEST marketing advantage over any other competitor in this industry. At the end of the day, we can "Show Them the Money"

It's their HIPPA Hurricane Holler-er-er-er-er, while the others are So-So.

Now that I have attempted to provide at least "some insight" into the Pay By Touch Healthcare Solution, prepare to become impressed by Clicking Here or on the picture on the right to watch their Healthcare Demo. It's technical, but, technically speaking, it's powerful.

Anyway, I found the demo to be quite I do this vertical market. There's obviously more involved than what I covered today, so I'll do follow-ups on the benefits to consumers, providers, healthcare plans, employers and Pharmacies in future consecutive posts.

If anybody has some insights, comments, criticisms, questions, etc. I'd love to hear them...feel free to contact me via e-mail.

John B. Frank