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Analysis

Consumerism is Here: Don't Let Your Revenue Cycle Get Left Behind

By Alexandra Wilson Pecci  
   July 03, 2018

Even as healthcare leaders across the country place greater emphasis on consumer-focused strategies, revenue cycle efforts are falling behind.

It's not news that the healthcare industry is far behind others when it comes to offering the kinds of services that consumers expect, like online appointments and automated payments.  

But even within the healthcare industry there are laggards, and among them is the revenue cycle.

That's according to findings from Kaufman Hall's 2018 State of Consumerism in Healthcare: Activity in Search of Strategy.

The firm surveyed more than 200 hospitals and health systems about topics like which consumer-focused strategies are high priorities and which services are widely available.

"By far the lowest scores were in this pricing arena," says Paul Crnkovich, managing director and head of consumer practice for Kaufman Hall.

Being able to answer the question "how much will this cost" is the "fundamental consumer expectation in just about every other aspect of their life," Crnkovich says.

However, for hospitals and health systems, "the ability to be able to do that efficiently and effectively is very, very low."

Key findings

Consumer-friendly pricing efforts include both competitive pricing strategies and price transparency. According to the survey, hospitals and health systems need work in both areas.

For instance, the survey showed that just 17% of respondents say they provide clinicians and staff with tools to answer patient questions about price.

The survey also found that:

  • 47% respond to price quote requests within a defined time period
  • 23% have an online tool that provides an estimated patient out-of-pocket price
  • 12% have an online tool that provides an estimated negotiated rate
  • 10% list prices on their website
  • 2% have contracts with cash market websites
  • 23% answered "none of the above"

In addition, 62% of respondents say they set pricing based on benchmarking of negotiated rates to the market, which the report calls "a traditional approach that does not take into account consumer price sensitivities."

Taking such price sensitivities into account means realizing that consumers are shopping around and comparing prices for all services, including healthcare services. This is especially true for things like outpatient services, labs, and imaging, where there are a lot of consumer options.

"People are starting to act toward healthcare the way they act toward every other financial decision in their life," Crnkovich says.

Taking action

To become more consumer friendly in general, hospitals and health system leaders should put themselves in their customers' shoes, Crnkovich says. Rather than thinking in siloes, they should imagine a patient's entire experience from start to finish, from shopping for a service, to paying their final bill, and everything in between.

"If you were able to map out that entire process, you'd be able to more quickly zero in on the pain points," Crnkovich says. From there, an organization can better focus its efforts.

"Not all pain points are created equal," he says.

For the revenue cycle in particular, Crnkovich recommends two main actions: "Let people know what it's going to cost upfront and give them the opportunity to pay right away."

First, organizations should establish a way to tell consumers how much their services will cost, such as developing a reliable price estimator tool.

In fact, other new research shows that publishing price information may actually increase revenue and business in general.

"Until you can answer that question, everything else kind of gets gummed up in the works," Crnkovich says.

He also recommends providing patients with a means and opportunity to pay for their services immediately.

"You’ve just saved yourself a lot of aggravation as a system, and you’ve undoubtedly improved the satisfaction of many customers," Crnkovich says. "And now you’re giving them something they've never had with healthcare before."

“Let people know what it's going to cost upfront and give them the opportunity to pay right away.”

Alexandra Wilson Pecci is an editor for HealthLeaders.


KEY TAKEAWAYS

Tell patients how much they'll be paying.

Give patients a way to pay upfront.

Price your services competitively.


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