Column | Transparency

Consumerism strategies: now, near and far

Column | Transparency

Consumerism strategies: now, near and far


Healthcare has much to learn about consumerism from the auto industry.

The auto industry is planning for a future where demand for some of its key products will be significantly lower. Sound familiar? Ford Motor Company CEO Jim Hackett uses a strategic planning framework that challenges leaders to work in three time frames at once: 

  • The now (i.e., succeeding while starting the pivot to the far)
  • The near (place bets on the future and shift resources accordingly) 
  • The far (envision a future state/role, knowing all predictions can change)

The framework was adapted for healthcare by Kaufman Hall chair and HFMA’s 2019 Richard L. Clarke Board of Directors Award winner Kenneth Kaufman.1 He applied the framework to the existential threats legacy health systems face, which make them vulnerable to disrupters. I believe this framework is also applicable to the healthcare consumer’s financial experience.

The now. Too often, consumers face frustration when trying to understand how much they will be expected to pay for healthcare. Adding to the uncertainty, a recent study found that the percentage of inpatients with commercial insurance who received a surprise out-of-network hospital bill reached 42%, an increase of 60% from 2010.2 Meanwhile, media coverage about hospitals suing patients for unpaid bills is garnering  attention from Capitol Hill. This snapshot suggests the financial experience has gotten worse, not better, since HFMA published its consumerism best practices five years ago. The majority of healthcare organizations have yet to adopt these practices, but doing so is essential for maintaining competitive viability in the near and far, when disrupters will have fully developed their capabilities and business models. 

The near. Health systems need to catch up with consumer-facing businesses where comparative price information is just a couple of clicks away. That means focusing on developing reliable price information for shoppable procedures; traditional providers must value patients in their roles as consumers. It also means going mobile. Consumers who are accustomed to transacting business on their smartphones will expect all their healthcare accounts to be integrated in a single app. Finance professionals may see only the barriers, but that’s not how consumers look at it. And it’s their lens we need to start using.

The far. Kaufman says that healthcare mega-mergers and new entities arising from outside healthcare will play a major role in the future healthcare ecosystem. He recommends that health systems start defining their desired role in what’s sure to be a dramatically different marketplace. It seems clear to me that legacy health systems will not be able to compete or collaborate with more nimble players unless they can master price transparency along with related capabilities such as cost accounting and pricing strategies.  

These are all areas that health systems should  be working on now. Both the near and the far depend on it. 

 

About the Author

Joseph J. Fifer, FHFMA, CPA,

is president and CEO, HFMA, Westchester, Ill.

Sign up for a free guest account and get access to five free articles every month.

Advertisements

Related Articles | Transparency

Blog | Community Benefit

Research finds widespread issues with community health needs assessments developed by nonprofit hospitals

A majority of hospitals make the required CHNA documents accessible, but many don’t include all the obligatory elements.

Article | Revenue Cycle Technology

Panacea provides innovative chargemaster, transparent pricing, auditing, compliance and revenue integrity solutions

One company’s software development provides both consultants and clients with solutions for optimum chargemaster, complying with CMS price transparency rules, identifying lost and new incremental revenue and more.

Column | Consumerism

The consumerism imperative in 2020: coming full circle

HFMA President and CEO Joe Fifer offers a perspective on consumerism initiatives in this pandemic year.

Blog | Coronavirus

COVID-19 interim final rule focus: Increased Medicare payment for qualifying COVID-19 treatment

HFMA's Chad Mulvany says HFMA believes CMS should modify the NCTAP payment as HFMA is concerned that payment methodology will not cover the cost of qualifying new COVID-19 treatments provided to Medicare beneficiaries.