As the COVID-19 pandemic wears on and worsens, revenue cycle leaders need to think about long-term, consumer-driven solutions to stay afloat and ahead of competitors.
Hospital discharges are down, consumers are losing their insurance coverage, and the number of patients with high-deductible health plans continues to rise as the COVID-19 pandemic wears on and worsens, according to the latest Kaufman Hall consumer survey, "The State of Consumerism 2020," which is fittingly subtitled "Special Report: The Missing Consumer."
Because of these and other factors, revenue cycle leaders need to think about long-term, consumer-driven solutions to stay afloat and ahead of competitors.
"In the long run, whether a given provider ultimately regains 90 or 95% of their pre-pandemic volumes will have an enormous impact on margins, which will in turn influence the decisions that health system leaders make around the direction of future operations," Paul Crnkovich, managing director at Kaufman Hall and the report's author, tells HealthLeaders via email.
"More recently, consumers have become more comfortable accessing care in traditional care settings, and virtual visit volumes have tapered off," he says. "But revenue cycle professionals and other health system leaders will be dealing with the impact of COVID-19 on volumes, margins, and operational decisions for years to come."
Even as some patients return to in-person visits, the report shows that trouble still remains.
For example, the report cites Kaufman Hall's National Hospital Flash Report which shows that U.S. hospital discharges in September declined 5.6% year-over-year, 2.2% month-over month, and 10.7% below budget
Meanwhile, 20% percent of consumers surveyed by Kaufman Hall in September said they or a loved one had experienced a change in insurance status, down only slightly from 22% in April.
"Hospital and health system leaders agree that the COVID-19 pandemic has unmistakably accelerated demand for more consumer-friendly services and processes," Crnkovich says. "As providers continue efforts to lure back the still significant number of 'missing consumers'—and as the current wave of infections shows no sign of abating—the importance of coordinated, strategic efforts to improve access, experience, pricing, and infrastructure has never been greater."
Crnkovich offers four action items for revenue cycle leaders:
1. Reckon with telehealth
"[A] permanent shift toward a higher proportion of telehealth portends significant financial implications for hospitals," he says. "On the revenue side, providers will need to understand and plan for the possibility that lower payment for telehealth services will mean less revenue for organizations already damaged by revenue losses from COVID-19."
2. Get lean
"The reality of lowered reimbursement rates may require the development of a leaner business model and changes to in-person service levels and capacity," he says. "On the expense side, if the shift toward telehealth is broad and lasting, hospitals may be able to rethink some facility and real estate expenses."
3. Prioritize pre-service
"A strategy that has benefitted both consumers and providers is being proactive in managing pre-registration, pre-authorizations, advance financial counseling, and point-of-service collections," he says. "This alleviates consumer concerns over the cost of care and helps ensure that the health system receives proper payment for services."
4. Price and deliver care strategically
"Even before the pandemic, an increasing proportion of consumers were enrolled in high-deductible health plans, elevating awareness of out-of-pocket costs. The economic upheaval wrought by COVID-19 has further accelerated this movement, and hospitals are also facing increased regulatory requirements for transparency in 2021," he says. "Hospitals and health systems have an opportunity to embrace a more strategic, consumer-driven approach to how they price and deliver outpatient services in order to meet rising expectations for convenience, access, and value."
Alexandra Wilson Pecci is an editor for HealthLeaders.