Issue link: https://beckershealthcare.uberflip.com/i/674245
34 Executive Briefing The Paradigm Shift in Healthcare – from Business to Consumer H ealthcare providers are becoming increasingly aware that today's patients have more control over how they obtain care and pay for it. Many providers now aptly view pa- tients as "consumers," given the rise of high-deductible health- care plans, increased access to mobile health and the desire for enhanced transparency in price and quality. Physician groups have traditionally operated in a busi- ness-to-business model where patients' medical bills were pre- dominantly paid by various government and private insurance payers. Physicians previously knew who to bill and what to ex- pect in the way of payment from payers, but today's payer land- scape has been transformed. As patients have been encouraged to take responsibility for the value of their healthcare purchasing decisions, so too have insurance companies used the notion of "consumer-managed healthcare" to shift the responsibility for payment to the patient by implementing HDHPs and health sav- ings accounts. Now, many healthcare providers find themselves increasingly working in a business-to-consumer model, in which success hinges on their ability to transform and excel in their capacity to connect, bill and collect from thousands of individual payers rather than scores of corporate payers. Recent statistics listed in a McKinsey Quarterly article confirm this, stating there has been a ten-fold increase in HDHP plans in the past seven years with more than 11.4 million people en- rolled in such plans, and steadily growing. HDHPs are a driving contributor of the 68 percent increase in patient payment liabili- ty from $250 billion in 2009 to $420 billion in 2015. 1 This trend isn't expected to cease either, with av- erage annual growth of out-of-pocket healthcare expenditures projected to rise to 5.5 percent by 2023 from 3.2 percent in 2013.2 According to Joe McMurray, vice president of patient experience with Zotec Partners, "This rapid shift to out- of-pocket healthcare expenditures is worrisome for hospital-based phy- sician groups because the payment methodologies and systems used by many hospitals are outdated and in- convenient when it comes to payment transactions among the self-pay after insurance patient population."Hos- pitals and physician practices must quickly get up to speed as they meet the demands of the new patient-con- sumer, he added. A Retail Approach The new post-reform environment has healthcare providers taking on a more business-to-consumer approach as they face mounting pressures to provide revenue cycle processes that are more "retail" in design. Mr. McMurray notes that real-time adjudication and point-of-service collections with tangible and effective follow-up strategies are an absolute must for health- care providers to interact with today's savvy patient-consumer. "As the role of the healthcare provider continues to evolve, so too will the way they handle payments," he notes. Citing another relevant statistic from McKinsey Quarterly, Mr. McMurray says, "Of the $2.7 trillion the country spends annu- ally on healthcare, $400 billion goes to claims processing, pay- ments, billing, revenue cycle management and bad debt — in part, because half of all payer-provider transactions involve out- dated manual methods, such as phone calls and mailings." 3 Ac- cording to McMurray, providers must be more diligent as they take on the patient-consumer population, creating new and bet- ter ways to make patient bills more understandable, with easier and more accessible payment options. "Zotec touches the patient multiple times, and through multiple channels in order to follow up for payment," he says. Patient input becomes increasingly important to physician pro- viders, who must understand patients' increasingly consumeris- tic behaviors and offer options that benefit them. Mr. McMurray remarks that physicians have to view the patient experience be- Sponsored by: "The revenue cycle is analogous to a retailer's check-out process in that it can either increase or decrease the likelihood of future encoun- ters, even more so given these relationships are more emotionally driven than, say, buying groceries or taking a ride with Uber." — Joe McMurray