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Adapting to Patients as Consumers The economy and emerging payment models are transforming patients into active consumers in the healthcare industry from a financial perspective. As a result, patients no longer merely receive services and manage their care. Instead, they are called upon to take an active role in managing their financial responsibility as well. What does this mean for healthcare providers? It’s not enough to simply provide care and bill a payer for payment. It’s necessary to develop more meaningful financial relationships with the patients themselves to ensure the healthcare organization’s financial health. Many forces are creating this new reality. As employers struggle to survive in a rough economy, they are cutting costs by shifting a greater percentage of the financial responsibility for healthcare to their employees. And with unemployment hovering at record levels, many patients don't have health insurance. These developments are driving consumers to become more conscious of the healthcare services that they seek, receive — and ultimately pay for. Shifting Costs to Patients Employers are adopting consumer-directed health plans (CDHPs) to save on healthcare costs. These plans are moving toward becoming the norm. They tend to require high-deductibles and are linked to a health reimbursement account or health savings account (HSA), making consumers responsible for a greater percentage of their healthcare bill. In the past, when patients had a fee-for-service or managed care plan, they received whatever care their primary care physician or specialist recommended, paid their co-pay and considered the healthcare transaction complete. Now however, greater financial accountability is causing patients to act as consumers and become more involved in the entire process. For example, they are apt to shop for care, comparing costs and outcomes among competing providers. In some cases, consumers are limiting their care to bare-bones services. They might, for example, opt to receive only one cholesterol test, instead of the recommended trio of tests. Creating Meaningful Bonds With consumers changing their behavior, healthcare providers must fully engage patients at each step of the care process. Providers need to proactively manage the self-pay process more than ever before. This means that patients will demand greater transparency into the care process and financial realities of the cost of care. Instead of delivering care without providing any clues on cost, healthcare has to become more like other industries. Patients must receive information on how much their care will cost overall and how much each service will cost. Additionally, this will place a greater burden on healthcare professionals to include alternate reimbursement models. Providers must provide that transparency in a user-friendly manner. As patients increasingly view healthcare as a retail offering, they will demand customized, personal service and will expect to easily interact with providers through electronic means. To that end, providers should lean on technology to not only ascertain payments but also to make it easy for patients to go online and access information about overall care, their own conditions and financial obligations. Indeed, organizations that provide better service will create greater affinity with patients. Real-time visibility into claims and payments will become increasingly important, and it will be essential to keep patients fully informed about their financial obligations. For example, at the time of referral or check-in, providers should use analytic technology to provide an accurate estimate of what the care will cost and what the patient will be responsible for paying. As consumers take a more active role in their healthcare and take on greater financial accountability for that care, they will become much more judicious in managing and selecting their services and providers. When they have strong relationships with their providers and understand their financial obligations upfront, consumers are much more likely to follow through with payment, helping to decrease or eliminate bad debt. Decreasing Bad Debt To avoid bad debt, providers should examine the patient’s financial situation early and throughout the process. Identifying which patients are eligible for charity and ascertaining a patient’s propensity to pay their bill can help keep patients on track. For instance, if a patient is deemed a financial risk, the provider can have discussions on alternative methods of payment upfront or see if they qualify for charity care. To create this mutually beneficial relationship with patients, providers must take advantage of the enabling and automating aspects of technology. Solutions that provide pre-service financial clearance, point-of-service interaction, post-service settlement and overall performance analysis can help create an affinity with consumers. You can find strategies for improving your self-pay processes in the white paper featured in this issue, Improving Self Pay at All Points of Service. The health of your organization’s financial performance is dependent on your ability to adapt to the new norm of consumer-directed healthcare. Dave Mason is senior vice president and general manager, Financial Solutions, RelayHealth, a business unit of McKesson. He has responsibility for the operational management of services and systems related to financial clearance, settlement solutions and connectivity services through RelayHealth's intelligent network for providers, healthcare institutions and consumers. Mason has 30 years of healthcare management experience. He joined RelayHealth in 2007 with McKesson's acquisition of Per-Se Technologies, where he was president of the company's Hospital Solutions division. He has served in various practice management and administration positions, including at Georgetown University Hospital in Washington, D.C., and Northside Hospital in Atlanta, Ga. Jim Morrison is vice president and general manager, Revenue Cycle, McKesson Provider Technologies. He is responsible for developing the McKesson Provider Technologies overall revenue cycle services and support strategy as well as managing the day-to-day operations of revenue cycle solutions. Morrison brings to his position more than 25 years of experience in managing services, development, product support and operations within McKesson, as well as in the healthcare and banking industries. |
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IN THIS ISSUE: Employers are shifting healthcare costs to their employees via consumer-directed healthcare plans. Rising premiums, the recession and unemployment have created a dangerous cycle. Once patients leave the hospital, the chances they will pay their portion of the bill drops dramatically. With lower revenues, providers renegotiate contracts with payers to remain profitable, causing payers to increase premiums charged to employers and individuals – starting the cycle over. With the increasing move to self-pay options, hospitals must take a proactive approach to capture this revenue. Enabling technologies can help hospitals improve collection at all points of service and boost financial performance.