Issue link: https://beckershealthcare.uberflip.com/i/717576
53 Executive Briefing Coopers, healthcare costs now outpace both economic inflation and wage growth. Coupled with the rise in insurance deduct- ibles and premiums, patients are more conscious than ever of how much they spend on healthcare services as medical costs consume an increasingly large portion of their paychecks. During the past 10 years, consumers have shouldered an in- creasing burden of medical cost sharing under employer-spon- sored and commercial health plans. A University of Michigan study found the rate of employees' out-of-pocket spending outpaced employers' increase in premium costs between 2009 and 2013. At the same time, Americans' deductibles have more than doubled in the last 10 years. This shift in who pays for healthcare rocked the economic foun- dation of the hospital industry. For the first time, a larger share of hospitals' overall reimbursement now comes from patients rather than commercial payers, according to TransUnion. As a result, hospitals are interfacing with consumers more than ever to collect. Unfortunately, many hospitals' collections and billing departments lack the customer service etiquette patients have come to expect in ordinary retail and service transactions. The changing economics of healthcare have made customer satisfaction a strategic priority for all hospitals in the shift from volume to value. Under value-based care, clinical outcomes and patient satisfaction bear weight in determining hospitals' prospective reimbursement. This means hospitals not only have to ensure patients receive unrivaled treatment in the exam or operating room, but in the billing department and registration desk as well. A New Type of Patient Loyalty Cultivating and retaining a loyal client base is crucial for phy- sicians to sustain their business practices. However, the avail- ability of cost and quality comparison tools has empowered consumers to transition between healthcare providers with relative ease. In fact, today's patients are more likely to transi- tion through multiple physicians throughout their lifetime, in stark contrast to previous generations, says Ms. Heymans. A dis- agreeable comment, long wait-time or negative billing encoun- ter is enough to drive patients out of one physician's practice into another provider's arms. Hospitals and health systems have to keep in mind that young- er patients today generally prefer information over personal relationships when it comes to healthcare decision-making. For example, millennials ages 18 to 34 are most likely to ask for a discount, ask for a cheaper treatment option, request a price check or appeal an insurance decision, according to PwC's Health Research Institute. At the same time, nearly half of the millennial respondents said they have no personal relationship with their primary care phy- sicians, and approximately one third of millennials said they prefer care in retail clinics. As these surveys suggest, the avail- ability of information is an increasingly greater driver of patient loyalty than the familiarity of the physician or hospital brand. Retailization of Healthcare Many physicians regard the commercialization of healthcare with mixed feelings. In some ways, the commodification of healthcare as a consumer service holds physicians and patients accountable for the respective quality and cost of medical care. "Knowing anything that happens in a physician's office can sur- face online raises the bar in terms of provider accountability," says Ms. Hall. At the same time, patients with high-deductible health plans are responsible for shopping around for health- care services to keep medical costs low, she ad. But that doesn't mean consumer-oriented healthcare is without its drawbacks. Consumers have access to more data and information than any generation before. But as any physician will tell you, data with- out context is meaningless. The challenge of the modern con- sumer is that he or she must filter and sort through volumes of data that often contain contradictory or inaccurate information to arrive at a conclusion. Physicians worry that without proper medical guidance from healthcare professionals, patients may pursue healthcare services that adversely affect their health. The New Patient-Physician Relationship As patients accept more responsibility for maintaining their health and for controlling the cost of care, they will expect pro- viders to help make the care experience as seamless as pos- sible. Ultimately, hospitals and health systems that distinguish themselves by providing meaningful information, delightful experiences and convenient engagement will be the organiza- tions that come out on top in a market ripe with disruption and competition. n Gallagher Integrated is a top healthcare consulting firm prepared to not only help you survive the coming changes, but to succeed in a post-reform world. We offer a wide range of comprehensive solutions—across healthcare compensation consulting, governance, physician services, employee & physician engagement, and executive placement—to help you align people, pay, and performance.