The word “consumerism” and its derivatives have been tossed around the broader healthcare industry for the greater part of a decade. How we define consumerism and look at consumer behavior in relation to our institutions, systems, and programs seems key to unlocking the door to better outcomes and higher margins. However, in a landscape with more disruption than ever—greater vertical integration, technology, and regulation—we still lack the answer to these fundamental questions: What do patients want? And, how do they want to own and control their own healthcare destinies?
An abundance of articles has been published expounding on the advent of “patient consumers” and how they compare to other service industries. The commonality between healthcare and other services exists in the need to uncover, interpret and apply strategies for personalization within a broad group while tailoring the experience to the individual’s unique preference, delivering a personalized experience with a standard approach.
The dichotomy within this concept is readily apparent within the healthcare market as we seek to find commonality within large groups of people and answer questions posed through an overreliance on general, data-gathering approaches (e.g., focus groups) and a standard, mechanized approach to healthcare education and the delivery of care.1 Additionally, healthcare exhibits major differences from other service industries. Providers must deal directly with the body of the consumer, in situations where they are both at-risk and vulnerable, and oftentimes unwilling.2
So, where does consumerism intersect price with transparency? The short answer is “everywhere” and the longer answer shows that most patients remain “passive” consumers of healthcare, especially when the patient is an established and frequent user of services.3 When we think about how this impacts overage consumption of care, patients who have a level of comfort with their provider tend to stay with that provider. Other factors—such as the ability to compare cost data—are needed in order to induce a new type of consumer behavior.4
Lately, as we look longitudinally across the healthcare landscape, we begin to see changes in this old mode of passive behavior. One factor is the increase in high-deductible health plans, accounting for nearly half of the population covered by a commercial health plan, including patients who obtain insurance through their employer and those who buy coverage independently.5 For providers, this means that patients/consumers are the third largest payor behind Medicare and Medicaid, a status that is behind the push for greater transparency through more access to meaningful data.
With a focus on transparency and patient empowerment, the CMS Inpatient Prospective Payment System (IPPS) rule gives patients new access to price information, mandating hospitals to publish their standard charges online in a machine-readable, searchable format. In an ideal world, this information could and should be used for patients to make informed decisions about the provider and location of their care, however, we find that this information adds another layer to an already complex process. Searching the computer-readable formats and the Medicare “Procedure Price Lookup” requires a knowledge of procedure codes or at least a working knowledge of the procedure that the provider has described. Without accompanying quality data, how do patients know if the less costly institution has the same outcomes as the more expensive institution—in the case of healthcare, we cannot reliably correlate price with quality.
We know that the CMS rule is an important step toward using price transparency in order to reduce the overall cost of U.S. healthcare. However, the current approach to the delivery of this price information to patients/consumers highlights some of the challenges reviewed with healthcare as a service, namely the application of generalized data to non-archetypal patients. Delivering price information is not only a good thing for the national healthcare market and for patients, but it is one of the most impactful ways that providers can support patients on their healthcare journey, while also improving the overall financial viability of the hospital or health system.
So, how can providers support meaningful price transparency while addressing the growing need for consumerism?
– Healthcare organizations must leverage technology to provide “patient-friendly” descriptions of healthcare services. For example, while “replacement of the right hip joint with a metal-synthetic substitute, cemented. Open approach” is an accurate and necessary description of the procedure, most patients are not well-versed in ICD-10 to fully understand it. Providing patients with both a friendly description AND the ICD-10 description at the time of order, allows the patient to effectively price compare, and provides a greater sense of ownership on their overall healthcare journey.
– The effective deployment of a patient-centric approach requires a process change in the way that care is ordered and scheduled. Asking patients for their preferences and segmenting them by preference, and other factors, including financial status, indicate their financial status can help providers develop personalized solutions, tailored to each patient and their unique needs.
– An integrated approach that combines process, technology, education, and analytics to create the best possible outcome for all involved.
– Process: to better respond to patient financial needs, it is best to start with a plan in mind. Old workflows should be evaluated and updated based on process and technology gaps, with staff assessed on evolving job requirements
– Technology: deploying estimators and other software enables organizations to tap into multiple databases, including chargemaster and contract management systems, improving accuracy and creating patient estimates with accuracy reported in the 90 percent range
– Analytics: gives leaders actionable data to monitor operations and reduce errors on the front end, helping prevent denials on the back
– Education: a well-trained staff is essential to implementing new processes, effectively utilizing technology upgrades and working with patients on their financial journey
45 states received an “F” grade for price transparency—for the sustainability of the industry and for the health of our patients, we can and must do better. This begins by seeing and addressing our patients as unique individuals—providing options, asking questions and applying technology-enabled solutions to this pressing topic.
Sloan Clardy is nThrive’s President of Technology Solutions where he is responsible for technology research and development, product management, technology support, innovation, as well as corporate development. Prior to nThrive, Clardy served as the Chief Growth Officer at Perahealth.
2. Berry, L. L., & Bendapudi, N. (2007). Health Care: A Fertile Field for Service Research. Journal of Service Research, 10(2), 111-122. doi:10.1177/1094670507306682 http://citeseerx.ist.psu.edu/viewdoc/download;jsessionid=DD088F62D088C0E8D356E11A6B8A606D?doi=10.1.1.516.7388&rep=rep1&type=pdf
3. Harris K. M. (2003). How do patients choose physicians? Evidence from a national survey of enrollees in employment-related health plans. Health services research, 38(2), 711-32. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1360911/
4. Harris K. M. (2003). How do patients choose physicians? Evidence from a national survey of enrollees in employment-related health plans. Health services research, 38(2), 711-32.