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How Real is Healthcare Consumerism?

By Gregory A. Freeman  
   April 04, 2016

"We saw a 20% increase in clinic visits during the same time frame, which, when correlated with the decrease in admissions, provides some indication that our efforts to shift patients from hospital to clinic is working," Herzog says.

"There is one other competing hospital which has not embraced a community-focused value philosophy like Holy Family Memorial has. In fact, if Holy Family Memorial had been the only provider in the county, the increase in hospital bills individuals, government, businesses, and insurers received would have increased only 22%," Herzog says. "If all hospital services in our county used our Right Care approach, it would have avoided more than $90 million in hospital charges over the past decade."  

Herzog notes that the hospital's Right Care value focus directly caused group health insurance premiums in his county over the same time period to increase 38% less than neighboring Green Bay, reflecting how hospitals and doctors can improve the economic environment.

Also, Holy Family Memorial's bad debt (as a percent of gross revenue for the hospital—not consolidated), decreased from 1.47% in 2004 to 1.13% in 2014.  

Herzog notes that the commitment to serving the community has forced Holy Family Memorial to transform its delivery system and cost structure considerably faster than if it had stayed in the traditional volume-driven mindset.

Herzog's hospital also formed the Consumer Transparency Theme Team in January 2015, responsible for making Holy Family Memorial as transparent as possible so that the patient knows what to expect from the entire experience. That means providing information on not just the cost, but also issues such as how the patient can expect to feel during and after a procedure or test, and who will be calling to follow up after discharge. The transparency team also works to provide quality information to patients in a form they can understand.

"Very few people can make use of the quality data that is out there because it is written from a provider or regulator point of view. It just doesn't resonate with the average citizen," Herzog says. "This team works to translate all the healthcare gobbledygook about healthcare costs, quality, and outcomes into the way two women at the hairdresser would talk about it, or two guys over a beer and a football game."

Holy Family Memorial also empowers the consumer by providing direct access to scheduling lab tests, therapy, and other care. The hospital's direct-access lab testing, for instance, allows the patient to schedule a lab test online without a physician referral, with results mailed the next day. The website lists the cost of 73 available lab tests.

The hospital also is working to accommodate patients' schedules, rather than the traditional approach that puts the convenience of the hospital first. Clinic hours were extended, e-visits were made available online, and Holy Family Memorial also implemented same-day appointments at its clinics.

The overall impact of consumerism is a positive one for the healthcare industry, Herzog says. "My greatest concern is that while the healthcare system is changing, albeit at a glacial pace, employers are struggling to make sense of this shift to consumerism," he says. "Employers rushing to high deductibles often give little or no help to the employee about how to appropriately access healthcare in this new environment."

More impact on outpatient services than inpatient
Consumerism appears to have more impact on outpatient services than inpatient care, says Mark Bogen, senior vice president of finance and chief financial officer at South Nassau Communities Hospital, a 400-staffed-bed acute care facility in Oceanside, New York. Patients still rely on their physicians to refer them to the appropriate hospital and generally don't question that choice unless the facility is out of network. It's only at that point that most patients will speak up and ask about an in-network alternative, he says.

Gregory A. Freeman is a contributing writer for HealthLeaders.

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