McKesson's Matias Klein on consumer financial engagement challenges and opportunities

As patients take on more responsibility for their healthcare costs, decisions about where to receive care are frequently made based on out-of-pocket fees and their satisfaction with the provider.

This shift from payer reimbursement to patient reimbursement has major implications for revenue cycle management, forcing hospitals and health systems to abandon traditional processes for the adoption of patient-centric practices.

The increasing prevalence of high-deductible health plans, evolving payment models and regulatory changes are leaving a growing number of patients liable for larger portions of their bills, and providers unsure about reimbursement.

Matias Klein, vice president of product management for RelayHealth Financial, the RCM arm of McKesson, spoke to Becker's Hospital Review in detail about how hospitals and health systems are responding to these challenges.

Note: Interview has been lightly edited for length and clarity.

Question: How are hospitals and health systems responding to the trend of higher deductibles?

Matias Klein: Higher deductibles are becoming a severe pain point for providers and consumers. Higher deductibles are interesting because they are market-specific. However, if you look at the national growth trend of high deductible plans, my perspective is that it's not ending. I see it continuing to grow for quite a few more years. Even groups in markets that aren't yet seeing a lot of high deductibles think it will soon become a significant pain point for them. In addition, engaging with consumers around payment requires totally new competencies and processes. It's not just about understanding a patient's propensity to pay, but also about setting expectations upfront and helping them understand their bill. Hospitals that engage patients upfront, focus on simplifying the consumer experience and align consumer expectations will be in a strong position going forward.

Q: What can hospitals and health systems do to ensure consumers are aware of their financial obligations upfront?

MK: The key is to align consumer expectations early in the process. One way to do this is to offer simple price transparency tools. Providers need to be able to furnish accurate cost estimates to patients prior to service, and be ready to collect more from them beginning at the point of service. And they must be sensitive in their collection efforts, as patient satisfaction scores are not only used to inform federal payments for healthcare services, but patient collections are increasingly linked to overall satisfaction. Financial counseling is another proactive strategy that can help. We've seen providers employ a variety of strategies. One hospital system used an online patient portal along with a patient financial advocacy program to boost online patient payments by 40 percent, realize a $1 million year-over-year increase in insurance self-payments, and dramatically reduce call center volume.

Q: How are hospitals and health systems responding to consumerism?

MK: Right now, there is a lot of experimentation going on the market. Organizations are testing many different things to see what works best. However, one thing that is consistent is that across the country, hospital C-suites are focused on the consumer. Practically everyone is now developing a strategy. What I've seen is that most hospital executives understand that today's patients are savvy, and demand complete transparency into what they will owe — up front.  Studies show that when patients receive timely, accurate information in advance, they are more likely to pay. Confusion over insurance jargon and fears about overpriced care all contribute to patient unwillingness to pay. A focus on the consumer financial experience is a logical starting point for most hospitals given patients' increasing financial responsibility.

Q: What resources do hospitals and health systems need to navigate consumerism?

MK: Bring experts in. Healthcare is not known for great service as compared to hospitality and retail businesses. Providers are just now beginning to understand how to navigate it. Understand consumers are not all the same. They're all very different, and as such, require a mass personalized approach to engagement. On the plus side, in healthcare, we greatly benefit from lessons learned as other industries have already led the way in adapting to consumer-centric models.

Q: How are hospitals and health systems re-designing their RCM processes based on a consumer-centric model?

MK: Most hospitals and health systems historically designed their RCM processes from the inside out (i.e. they focused on administrative tasks they needed to complete and organized around those jobs). However, today, leading provider organizations recognize the need to re-design their RCM processes from the outside in (i.e. from the consumer's point of view). Having a consumer-centric RCM process makes it easy for patients to access, navigate and understand their healthcare experiences, which directly leads to improved financial outcomes for hospitals.  Not everyone has figured out exactly how to do this, but a light bulb moment has definitely occurred. Most leading hospitals are taking action. The key is to start working to accelerate learning and develop expertise within your organization. I recommend hospitals and health systems bring outside experts in to help refine their consumer strategy and to support change management activities. Every provider is different, but those healthcare organizations that get a head start now will be far ahead of the pack and well positioned for success in the future.

 

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