The challenges of high-deductible health plans and consolidation in healthcare: 3 CFOs weigh in

The popularity of high-deducible health plans has increased significantly in recent years, and that is a problem for healthcare providers, as it is ultimately up to them to collect the payment.

To handle the influx of patients with high-deductible health plans, John A. Orsini, senior vice president and CFO of Northwestern Memorial HealthCare in Chicago, said his organization is using a pre-procedure collection model. "We're focusing on determining what the patient's out-of-pocket cost will be and getting that information to the patient and securing payment before they have the procedure done," said Mr. Orsini during a panel discussion at the Becker's Hospital Review 6th Annual Meeting in Chicago. He said securing payment before a patient receives treatment is difficult to do, and "patients don't like it." However, without this process in place, Mr. Orsini said organizations are looking at collecting 8-10 cents per dollar on a procedure.

Pat McGuire, CFO of St. John Providence Health System in Warren, Mich., said his facilities are also seeing more patients with these types of plans. When it comes to high-deductible health plans, he said the health insurance companies are really "getting a free lunch." They're benefitting from selling these plans, which they call high-deductible plans but "are really catastrophic plans," and they're also benefiting from people with these plans utilizing less healthcare services because they have such a high financial burden, he said.

Shifting gears in the discussion, the panelists also shared their views and strategies concerning consolidation in the healthcare industry. "There's a tremendous amount of overcapacity and as time goes on there's going to be fewer hospitals," said Mr. Orsini. However, "Our point of view isn't that bigger is better, but that better is better," he said.

Jeff Rooney, former CFO of Chicago-based University of Illinois Hospital & Health Services System, shared a piece of advice on consolidation as well. He said, "If you are going to become part of a larger national system you can't get away from serving your local market."



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