Once upon a time in healthcare, an insured patient went to the doctor, paid a manageable copay, and could access affordable healthcare when it was needed. For more than 25% of employed, insured adults, those days of affordable healthcare are now a fairy tale, as reported by the Commonwealth Fund. Among low-income insured patients, the number of patients with high health cost burdens balloons to more than 50%.
Deductibles have increased six times faster than wages since 2010, and now 80% of workers with employer-sponsored insurance are on deductible-based plans, according to a 2015 study cited in the New York Times.
These tectonic shifts in the health insurance landscape mean that most patients can no longer afford to choose healthcare based simply on loyalty or location. Patients have taken on the mantle of consumer, and all of the responsibility that comes with it: comparing prices, researching quality, and weighing cost versus benefit, even for needed care.
To engage these new consumer-patients, take a cue from retail. Be a partner with patients and make shopping for healthcare as easy as shopping online. Giving consumer-patients the power to control their purchasing decisions is the key to engaging them.
Meet the new consumer patients
Consumer patients are paying out-of-pocket, due to an unmet deductible, underinsurance or even lack of insurance. Most healthcare shoppers are between the ages of 25 and 44, with 30% between the ages of 25-34 and 23% between the ages of 35-44, according to a 2015 Healthsparq analysis of data from more than 523,000 cost estimate searches1.
These are computer-savvy users who are accustomed to finding purchase information with a click. This is the Yelp generation. It should come as no surprise that these consumers expect no less immediacy and accessibility from healthcare. According to 2016 Advisory Board research, price is increasingly the most important consideration for a large segment of patients seeking “shoppable” procedures like imaging, orthopedics, labs, and some outpatient surgeries:2
● 56% of U.S. healthcare consumers seek out price information before making a purchase
● 47% cite out-of-pocket cost as their most significant factor in deciding between providers
The Advisory Board research further shows the surprising disparity in how consumers are obtaining price information versus how they would prefer to research that information. The vast majority of respondents (71%) are seeking information directly from the source3:
● doctor’s office, 27%
● insurer, 27%
● hospital/medical facility, 17%
Unfortunately, 60% of physicians responding to the Advisory Board survey report feeling that neither they nor their staff have access to reliable cost information to share with patients. This lack of readily available cost information at the provider level may contribute to the fact that among the preferred methods of researching cost, Advisory Board respondents ranked directly contacting doctors or hospitals lowest, with only 2% of respondents preferring each. Convenience takes the top ranks of preferred cost research channels:
● employer health assistance programs, 26%
● internet price search, 15%
● Insurer website, 11%
These consumer behaviors and preferences make clear what patients are expecting from healthcare entities:
1. Easily accessible cost and quality information
2. Trustworthy information
3. Convenience
Taken together, they present an opportunity. Cost is just “So what?” data unless the patient can act on it. Let the consumer need for convenience facilitate point of sale collections by making price information actionable.
Point of sale collections: why engagement matters
Engaging with consumer patients early in the purchase cycle means managing expectations of the patient’s financial responsibility and allows multiple touch points to offer payment options and solutions to help facilitate patient buy-in. Help patients understand the bottom line of what they will be expected to pay, make it as easy for them to pay as possible, and providers increase the odds of collecting payments in full and eliminating bad debt. A positive consumer experience at the point of purchase helps increase rate of patient payment.4
How to engage consumer patients
Consumer patients need to feel empowered to make the best purchasing decision for them and their families. To engage with them, we must be a partner who makes it easy to make an informed choice. The two greatest tools we can offer consumer patients are convenience and simplicity. In short, we must make healthcare a consumer-friendly marketplace.
Goal 1: Provide easy access to price & quality information.
Goal 2: Maximize convenience.
Goal 3: Streamline payment processes.
These are achievable goals. We can see them met in an example of a consumer-friendly healthcare marketplace in action: episodic care bundling + online purchasing.
Episodic bundled care
“You might not go back to a restaurant that gave you a bill for the appetizer, then a bill for the bread, then individual bills for the entree and drink.”
– Holly Fletcher, the Tennessean
Bundling an episode of care protects the consumer patient from the complexity of the medical billing process and eliminates the fear of surprise balance billing or phantom providers. A bundled payment offers the consumer an “All-in-One” price, inclusive of all associated fees. This is a benefit beyond basic transparency: transparent procedure fees alone never represent the whole cost, and patients may not know to ask about facility fees, lab fees, radiology reading fees, and more. Creating a bundle that encompasses an entire episode of care gives the one price consumer patients care about: the bottom line.
Creating care bundles
Bundled episodes of care can be created vertically, within one system of employed providers, or horizontally, pulling together services from unaffiliated providers. Horizontal bundling can open a world of services beyond the scope of a single system. When administered through a third party, as in the case of a bundling software solution, all providers need to do is set their rate, and the effort of negotiating and staffing the bundled care episode falls outside the practice. Third-party bundling solutions can also eliminate fear of price fixing and can distribute each bundle participant’s reimbursement as payment is rendered.
Benefits of bundling
Bundling an episode of care also allows the option of prepayment, which eliminates bad debt and the administrative burden of collections. Without the need for claim filing, providers can rely on accelerated distribution of funds and no chance of denied claims.
Bundled payment can make care coordination between multiple providers transactable. Distributing payments from a prepaid price to each provider participating in a bundle is simpler on both ends of the transaction than the patient receiving individual bills for each service, which in turn can require as many attempts to collect. Bundled payments satisfy all three of the previously stated goals of the consumer-friendly marketplace for both consumers and providers: one upfront, all-inclusive price that’s easy to access, the convenience of the prepayment option, and a single, streamlined payment.
Online purchasing
“Meet patients where they are.”
– Leslie Schreiber, Advisory Board
Consumer patients want to be able to research prices online before committing to a purchase. Here especially, healthcare can learn from retail. Make prices easily visible and accessible with minimal searching. Patients who cannot find the price from one provider may well find it from another, writing off the first provider as an unviable choice – or they might skip needed care entirely.5 Bundled care prices can make price comparison simpler for your patients, but even if your facility has not implemented bundles, displaying price estimates is better than having no information available to the savvy healthcare shopper. The best results come from immediately actionable pricing information, with minimal steps between price research and purchase – just like shopping online.
Online healthcare purchasing can be as simple for consumer patients as online retail shopping. Beyond making it easier for consumers to shop and compare, online purchasing allows for upfront payment, expedited scheduling, and the option to “lock in rates,” giving the impression of additional value. Credit cards, PayPal, and health savings account or flexible savings account cards make payment familiar and easy to understand for anyone who has ever shopped online. CPT codes associated with purchased procedures can be stored electronically and retrieved in report form to support universal claim form submission. Patients no longer need to stand in line in front of a pane of glass staring at a busy front desk staffer to pay for healthcare – much to the relief of both parties, no doubt.
Be a consumer patient partner
Engaging consumer patients means being a partner. Gone are the days of telling a patient where to go and what time to be there to receive care. Patients need to be educated, informed, and empowered. Healthcare will always be a complex and ever-changing industry, but as healthcare leaders, we can shield our patients from as much of that complexity as possible. The two most powerful tools we can give consumers are convenience and simplicity. Until the day when we can deliver high-quality healthcare to our patients’ doorsteps at the touch of a button, we can at least make purchasing healthcare seem that easy.
About the Author
Ms. Cawiezell is the Executive Vice President of MDsave, the world’s first online healthcare marketplace. She brings her extensive knowledge of the retail industry to healthcare and specializes in helping the medical community effectively compete in retail medicine. Having driven development for top U.S. retailers like Target, Kroger, Wal-Mart, and pharmaceutical brands like Astra-Zeneca and Glaxo Smith Kline, Ms. Cawiezell came to healthcare and witnessed the decline of reimbursement by commercial insurance. Now, she uses her experience to help transform hospital systems into consumer-friendly environments where physicians and medical personnel are compensated in a clear, consistent manner.
1 Healthsparq, “2015 Health Care Shopping Trends.” Presentation.
2 Schreiber, Leslie, “How Are Your Patients Looking for Price?” p.3. Advisory Board, 2016.
3 Schreiber, p.4
4 Schreiber, p.7
5 Schreiber, p. 6
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
