Not only were patients avoiding high-cost care, but they were also avoiding inexpensive or fully reimbursed care because they didn't want to risk having to pay for follow-up treatment. For instance, a false positive mammogram, which happens about 15% of the time, would necessitate an office visit that the patient would pay for, so some women elected to forgo the mammogram, he says.
High deductibles force more dialogue with patients, and cost is almost always part of dialogue. That discussion changes the course of treatment about a quarter of the time, he notes.
"Providers have had to become more aware of what the cost of services are," Herzog says. "For the services that they commonly order, our providers are pretty aware of the costs and can discuss treatment options with the patient. Patients will ask directly about the cost and whether this test or therapy is really necessary, so our providers have to be able to discuss that instead of passing them on to someone else."
The right setting for a patient's care
Responding to that consumer move by the patient, Holy Family Memorial adopted a corporate philosophy called Right Care, striving to provide each patient the right care in the right setting, with the right outcome. The right setting is the one that presents the patient with the lowest financial risk and the lowest physical risk, Herzog explains.
The hospital also has worked to provide more cost information directly to the consumer. For 10 years, the hospital has offered price estimates that outline the patient's out-of-pocket expense for almost all procedures. When Herzog recently underwent knee surgery, he didn't specifically ask for the cost estimate but found one in his mailbox a week before the procedure, detailing all the costs and the out-of-pocket expense from his health plan.
"A strict focus on cutting costs and suppressing utilization purely driven by insurers can be seen as bad, mostly because of the way it is being forced on consumers and providers, but I think it can start a healthy dialogue," Herzog says. "We've been trying to help those we serve by intentionally lowering utilization of expensive hospital services for over a decade now, and it's been not good for hospital finances. But because our mission statement is to serve communities and not our own corporation, we decided to do this because it's the right thing for the community."
The efforts to lower utilization costs at Holy Family Memorial has resulted in lowering inpatient admissions by 45% in the past decade.
Gregory A. Freeman is a contributing writer for HealthLeaders.