Healthcare consumerism continues to take hold. Are you ready?
The business of healthcare is nothing if not a study of constant flux. From the simple employer-based programs that arrived after World War II, to the HMO era and beyond, how the cost of healthcare is covered has always been changing. For the past several years, the overwhelming movement in healthcare payment has been towards an increase in the burden patients must carry financially. As they pay more, patients are taking more control over who treats them and what they are willing to pay for those treatments. This consumer mindset has already begun to impact how providers across the industry interact with their patients.
The Patients become the Payers
Whether providers are ready or not, the consumerism trend has arrived in healthcare. Patients have been forced into a consumer role by rising costs and Consumer Driven Health Plans (CDHPs) that include higher deductibles and co-pays. In a 2006 Wall Street Journal article called "A Specter Stalks the Hospital Biz", Holman Jenkins discussed the hard numbers patients now face:
The HMO, yesteryear's solution to our healthcare dissatisfactions, held the consumer responsible for about 1.5% of their expenses out of pocket. The new dispensation relying on copays and deductibles is headed in the opposite direction, raising the consumer's share to 30% or more. At GM, a last holdout of the old third-party socialism, blue-collar workers pay roughly 7% of their health bills out of pocket, but soon will be in a boat comparable to GM's white-collar workers, who get dunned for 27%. Even Medicare and Medicaid are headed the same way, gradually, though they largely defeat the purpose by guaranteeing hospitals 70 cents on the dollar for copays and deductibles hospitals can't (or don't bother to) collect from the patient.
As this consumerism trend takes root and patients bear more of the burden, they have also become more educated about where they seek care. The Internet has allowed patients to apply their consumer skills to investigating doctors and hospitals like they would a dishwasher or home. Online diagnosis, research and customer feedback services allow patients to get a feel for a healthcare business before walking in the door. As a consequence, patient referrals are becoming more and more valuable in the modern healthcare market.
The Providers Adapt
One common theme hospital systems across the industry have is investing in new technologies. While this trend means providers are buying better diagnostic equipment to improve the delivery of care and put patients at ease, it also means providers are automating manual business processes which can result in lost revenue and an inefficient workflow.
As patients migrate from traditional and reliable insured categories to more financially risky self-pay categories, hospitals and private practices have felt much of the burden. Write-offs and uncollected revenue have quickly become primary concerns for CFOs and doctors alike. Automating key business processes can find otherwise missed payment opportunities from government and commercial payers. Automation can also reduce the errors and delays that hurt a provider's billing and payment cycle over and over.
Efficient and clear patient billing practices can save time while helping patients clearly understand the often-difficult financial details of their healthcare visit. These efforts have benefitted providers two-fold: by making their processes more efficient, and increasing the patient satisfaction that leads to valuable return visits and word-of-mouth referrals.
Working together
Consumerism in healthcare isn't creeping up on anyone; it's been a primary topic of conversation for years. What is surprising some, however, are the real world differences between the forward looking theories and the concrete arrival of patients who now act as consumers within the healthcare marketplace. The best way for providers to stay ahead of the curve is to have a sound plan that keeps your patients, your staff and your processes working together as much as possible.
