Kaiser Permanente’s billing system is insane.
I work for a very small startup.
We are small enough that buying a company insurance plan doesn’t really get you anything over individual rates. A couple of us are also on spouses’ company insurance plans, only leaving two or three of us actually going through our company for insurance. As a result, our structure is that we choose the insurance that we want, pay for it out of pocket, and then submit the monthly bills for reimbursement. This works out reasonably well, I get the insurance I want, and the company pays for it. Great!
When going through all of our options, my wife and I landed on Kaiser Permanente. The price seemed reasonable, they had pretty good ratings, and the coverage seemed to be decent as well. Initially, things went smoothly. Then, all of a sudden, the bills stopped coming. We had signed up for Kaiser’s automatic EFT program so that we could automate the process of paying them every month, just like we do for every other bill that we pay. I have set up automatic payments for nearly every service that I have used since I started paying bills, as those systems became available.
Manual bill paying punishes customers
The whole process stresses me out. Let’s step through the process for paper bills, you have to watch your physical mailbox and sift through all the junk looking for something important. Then, you get it, and have to open the several important looking things to further weed out junk. You are rewarded by finding something that tells you that you owe money somewhere. Next, you have to write a check, put it in the envelope (usually requiring a stamp, cheap bastards) and mail out the bill and the check, hopefully in enough time to get there by the due date. The whole process punishes you, there is no single reward in any of those steps of bill paying. You need to sift through your mail and are punished for finding what you’re looking for (the bill). Then, you act on that and are punished again - both needing to shell out money, a stamp and needing to get the thing to a mailbox.
The process for manual online payments is slightly better, but not by much. First, you need to keep an eye on your email inbox, looking for sifting through all the junk, looking for something important. When you find a bill, you’re still punished by finding it, in that you’re told that you owe money to someone. Now, you need to go to the website and remember a password, where the password requirements strip out the special characters and shorten the usual password that you use. Now, you’ve managed to log in, and now need to navigate their crappy interface to figure out where you can actually pay your bill. You do that, then you need to pull out your credit card. Now, you step through the overly long payment process and save a pdf of the confirmation page.
Neither of those options are fun, and both of them punish you throughout the process. Many of the services that we use seem to just be there, in the background, and you don’t think about them all that much. I want them to be billed in a way that I don’t need to think about them all that much. I budget for what gets paid, set up the automated payments, and let it run itself. Periodically, I’ll run through and audit things, looking at my bank statements for amounts that differ from what I had expected to see, and then log into those billing sites to track down the bill in question and look it over. This system works out pretty well, and while there have been a couple of times where I’ve overpaid for a few months, I’ve always been able to have it corrected after looking things over and contacting the company involved. No problem.
Kaiser and the EFT
Then came Kaiser. We signed up for their EFT system that was pitched to us along with one of our bills. Great, we thought, no more sending checks in the mail, this will all be handled for us. We signed up, and it was handled for us. Until, a couple months later when the bills stopped coming in. We called Kaiser and asked them to send the statements, and they did. Ok, small glitch, no big deal. The next month, the same thing happened. Again, we called, this time, asking if there was something strange going on. On the phone, I was told that when you sign up for EFT, you stop receiving bills in the mail. Alright, I thought, I’ll just get them online. I checked the billing section of my account and there had been nothing saved in there since we signed up for the EFT. At this point, I had no way to prove, beyond the withdrawals from my bank account, that I was paying Kaiser, or what I was paying them for!
At this point, I was quite confused. Why was there no digital record of all of my bills? The first bill was there, but none of the others. I don’t think that I have ever encountered something like this before.
I asked Kaiser what was going on. They told me that in the EFT agreement that I had signed, it said that we would stop receiving bills. I asked what about the electronic copies, they said that we would stop receiving those too. (I’m going to continue this based on the assumption that they were correct in that the EFT agreement stated that bills would stop coming, however that isn’t true.) I asked how I could obtain a record of payment for my healthcare, they said, ‘look at your bank statement’. I was floored. I asked to speak with a manager.
I spent an hour on the phone with a manager 'discussing’ this issue. I’m fairly stubborn, and logical, and simply couldn’t accept his answer. The answer to this, was repeatedly that when you sign up for EFT with Kaiser, they stop sending you any form of a bill or statement, and that this is reasonable because you should expect it and can look at your bank statement. This didn’t work for me for two main reasons, I need the statements to get reimbursed, and I generally want to have some record from the people that I am paying of what I’m paying for. Another reason that this didn’t work for me was that it was completely illogical. No other company that I have dealt with has ever operated this way. Ok, if I sign up for automated monthly payments, and you don’t want to pay for paper bills to be sent every month, that’s fine, as long as I can access them online.
They claimed that this system was paperless, but it was really statementless! I couldn’t log in to get those statements online, because the statements didn’t exist - or so they claimed. I kept grilling the guy on how they were billing me if they weren’t able to generate a statement, and he kept saying that it was all just automatic, and that this is what I had agreed to (again, according to the agreement, this is not what I had agreed to). He went on to claim that all the companies that he dealt with operated in this way. I said 'bullshit’! This manager was lying to me on the phone. I’ve never heard of a company operating this way, even cable and telecom companies do a better job with billing than this. My main question was this, 'why can’t you generate the electronic bills and make them available to me through your web portal?’ This wouldn’t require much investment beyond ~1MB per month per customer, something they do for anyone who doesn’t enable EFT. It would take years for a single customer to cost them a cent in server storage. He kept claiming that the EFT system just wouldn’t do that, and that I was unreasonable for asking for it. I suppose that the insane part of this is that I kept asking the rep the same questions, expecting different answers. All I wanted to hear was, 'yeah, you know, you’re right, this doesn’t make a whole lot of sense, our system is not set up in a great way, and we should fix this.’ Or, at the very least, 'yes, the system is screwed up, I’ll pass this along to my bosses.’ Instead, this guy claimed that they were doing the reasonable thing.
Ok, let’s do a little math here. To simplify, let’s assume that the storage cost for storing a customer’s records is $0.01/yr. If someone needs to call customer service to request a bill while on EFT, they would spend maybe 10 minutes on the phone. If the rep is getting paid $15/h, then each call costs them about $2.50. For each call that they eliminate, they could store statements for 250 customers for one year. Now, I’m going to use Wikipedia’s numbers for the Northern California region, which has 3,351,449 members. If they stored all the records for everyone, that comes out to $33,514.49/yr. If more than 13,405 people (~0.4% of their customers) call in once in a year or over 1,117 people (~0.033% of their custmers) call every month requesting their bill, Kaiser is losing money.
Kaiser’s business is billing
This was obviously incredibly frustrating to someone who has worked on medical billing systems, and knows for a fact that, even if they are odd and difficult to work with, they can be tied together when necessary. My larger concern was that Kaiser’s business, for the most part, is billing. Billing should be Kaiser’s core competency, their business is to shuffle money around and to keep track of it. Mostly, this means billing customers, sometimes it means paying bills sent by medical institutions. If Kaiser has this much trouble sending me my monthly bill, what’s going to happen when I actually need to use them for something, or when my bill becomes more complicated than my monthly premium?
Again, working at a startup, I simply don’t have much time to dump into investigating this further, or finding different insurance and switching over. I’m strongly considering it. In the meantime, I cancelled our automatic EFT, and the bills have magically started coming again. What do you think? Is any of this reasonable on Kaiser’s part? Or are they just terrible at what they do? Here’s a pdf of the EFT agreement that I found, nowhere in it does it mention anything about paperless or statementless billing.