Patients are now consumers, and it's changing everything about how healthcare works.
On the surface, it makes sense. Patients should take more control over their choice of care if they are paying for more of it. But as healthcare leaders surveyed by Healthcare Finance say consumerism will be the largest driver of change in 2016, many point to challenges that come with the transition.
For starters, healthcare has changed from being about what's convenient to the provider to what's convenient for the consumer, said a panel of experts speaking about the "Age of Consumerism" during the Revenue Cycle Solutions Summit in Atlanta in December.
"Where we've moved over the past five years is self-service," said Mark Ehalt, senior director of revenue cycle operations for the University of Pittsburgh Medical Center.
Patients want fast, convenient service in the form of online payments, retail clinics and an improved patient experience. The onus, then, is for health systems to make sure they have those pieces in place.
Hospitals are already facing competition from major pharmacy chains such as CVS and big-box retailers that are building networks of walk-in clinics to make it easier for patients to get convenient care. In response, many hospitals are launching their own clinics, some in partnership with retail chains such as Walgreens, to stay on top of the consumerism trend.
Bills and collections
Perhaps the biggest challenge that comes with consumerism is the pressure it puts on healthcare systems to collect from the patient.
"No question the trend is for larger employers to move to high-deductible or consumer health plans," said Andrew Ziskind, MD, managing director of Huron Healthcare. "That is impacting decision-making and driving consumers to higher quality, lower cost providers."
Lower or not, there is still a cost, and health systems are putting a lot of effort into streaming the billing and collections process so that consumers not only pay what they owe, but more importantly, have good experiences through the process.
Andrew Ray, director of physician revenue cycle operations for Stanford Children's Hospital, said that hospital implemented a single patient statement that has won consumer satisfaction. That's something experts see accelerating in 2016 as consumers lose patience for the confusing multiple bills they receive from providers.
"What we're learning is people don't want to pay the bill until they know what they owe," said Mayo Clinic Revenue Cycle Director Mark Norby.
But even after consumers know what they owe, getting them to pay can be a process.
Chris Kiser, vice president of Patient Financial Services for the Carolinas HealthCare Systems, said the paradigm shift has gone from not asking everybody for money, to asking everyone, to now being more strategically focused.
"We were hounding everybody, treating everybody the same," he said. "If you're paying your bills, we don't need to be hounding you."
Point-of-service collections have more than doubled over the past four years, but providers will need to do better, according to The Advisory Board Company's recent Revenue Cycle Survey.
"This move to collecting payment at or before the point-of-service reflects the industry's experience that as more time passes after care is delivered, a patient's propensity to pay decreases substantially," said Christopher Kerns, managing director of research and insights at The Advisory Board.
Point-of-service collections have increased to a median of 0.57 percent of net patient revenue – and high performers are collecting 1.1 percent of net patient revenue, the report found. They will need to collect 5 percent of net patient revenues at the point of service to remain financially healthy as patient obligation expands, according to The Advisory Board.
That's where analytics comes in, which gives healthcare providers the ability to determine what people can pay, set routines for effective follow-up and create analysis benchmarks on the performance of collections programs.
Jerry Bruno of Deloitte Consulting said providers know very little about patients' financial profiles. He expects that by the end of the decade, 20 percent of payments will come from the consumer. Analyzing the data on consumers is key to managing that.
"We need to create a financial care plan based on where they fall," Bruno said. "If you have means of pay, your account would flow through one revenue cycle process. If you have a bronze plan and high out-of-pocket, and have a $10,000 bill you can't afford, with a profile we should be able to see that. It should result in a higher ROI."
Hospitals are measured on patient experience, and with insurers planning to tie even more payments to quality in the coming years, the importance of engagement will only heighten in 2016.
Corey Meyer, director of patient access and virtual health at Lancaster General Hospital, said the hospital's goal is to offer a flawless experience around the financial side of care.
"Really our vision is to have a flow where a patient gets a text message from their physician. It's going to say, 'You need a lab test, schedule it,'" he said. "At that point they'll know how much it is, based on their insurance, be able to potentially pre-pay, give a discount for a lab site that is under-utilized, and if they need to check in, do so on the phone."
Studies have shown that a positive financial experience is important to patient satisfaction, with 82 percent of patients recommending a hospital if their experience with the billing was good.
Like Healthcare Finance on Facebook
Meyer said Lancaster has already changed its online and paper billing statements, creating one that has the same look and feel for both. Lancaster has already seen overall growth in net collections of $1.6 million and an increase of $1.7 million for self-service pay, he said.
It's those kinds of results that will keep healthcare busy in 2016 as more of these new consumers react to facilities that focus on more than clinical services and put financial treatment almost on the same plane as care.
"They want us to take care of them when we're not taking care of them as a clinician," said Norby.