The volume of direct patient payments to providers increased 58 percent from 2013 to 2016, according to InstaMed's annual report on trends in healthcare payments.
Growing patient financial responsibility poses challenges and opportunities for healthcare organizations. Pragmatic hospitals are looking to the digital transformation of payment in sectors outside of healthcare for ingenuity when it comes to helping patients pay for their services.
When asked to name companies that empower consumers through digital transformation of payment, hospital executives who gathered at a roundtable discussion Sept. 22 at Becker's Hospital Review's 3rd Annual Health IT + Revenue Cycle Conference in Chicago listed disruptors like Lyft, Airbnb and Expedia. These companies ensure choice, immediacy and consistency when it comes to paying for their services. According to the executives, these three tenants are essential to positive customer experience.
In the age of digital transformation of payment, hospitals and health systems need to empower patients as consumers to improve revenue cycle performance. However, lack of price transparency and undefined financial improvement processes limit hospitals' efforts to empower patients. To address this, hospitals must mobilize communications, tap talent outside the healthcare sector and drive culture change from the top down.
Defining digital transformation of payment
Digital transformation of payment in healthcare is the integration of and opportunities for digital technology in revenue cycle management processes. Hospital executives are deploying online portals and price estimators to connect with patients and their wallets.
Companies transforming traditional payment systems, like Airbnb and Lyft, are creating social change, a corporate director of revenue transformation strategy at a 93-hospital system in the northern part of the country said during the conference. The companies transformed payment systems by digitizing transactions and storing payment information to allow those transactions to occur with a simple tap. Airbnb and Lyft "empowered people. I think that empowerment is critical in healthcare," the corporate director added.
Factors impeding hospitals' efforts to empower consumers
Two factors limit hospitals and health systems' efforts to empower healthcare consumers through digital transformation of payment.
Lack of price transparency
Whether price matching smartphones at Best Buy or comparing flight prices on Orbitz, consumers insist on cost transparency. Achieving price transparency in healthcare, however, remains a conundrum. Online payment portals and price estimators, while heralded as possible solutions to healthcare's price transparency problem, are often not linked to decreased healthcare spending, according to a recent study published in Health Affairs.
Price transparency is essential to ensuring patient satisfaction and staying competitive, a chief information and revenue integrity officer at a 378-bed hospital in the Northeast said.
"At some point, as patients become more savvy … we have to become more in-tune with what our competitors are charging," he said. "Now we want to be able to make moves and adjustments that the market dictates." If a "particular procedure is a little cheaper down the street, we need to become more competitive."
Undefined financial improvement processes
Price opacity is acerbated by undefined financial improvement processes, executives said. Hospitals without a defined financial improvement process, especially ones that make digital payment a core tenant of their patient experience, limit how much they can empower consumers and improve revenue cycle performance.
"We don't have a defined book process to reduce costs," said a vice president of revenue cycle and operational performance improvement at a 7,600-bed health system in the Southeast. Instead, the system is "going out and looking at how many examine rooms are empty" on any given day to determine what it could do differently.
This approach is common among hospitals, said Clifford Goldsmith, managing director for the U.S. provider industry at Microsoft. Hospitals' difficulty implementing financial improvement processes impedes their ability to work collaboratively to empower patients as consumers, he said.
"The reality is, you look at car manufacturing, there's a defined process and they have all learned from each other." In healthcare, Mr. Goldsmith said, "we're not learning from each other."
Solutions to improve revenue cycle performance through consumer empowerment
To address factors limiting hospitals' consumer empowerment efforts in the age of digital payment, hospitals must enter the mobile market, recruit talent from nontraditional sectors and ensure CEOs are driving culture changes.
Mobilize communications
Adhering to the executives' tenants of a positive consumer payment experience — choice, immediacy and consistency — in healthcare is possible through mobile communications. One senior director of revenue cycle of a 443-bed hospital in the West said her organization implemented a mobile app to estimate a procedure's cost, giving patients choice, immediacy and consistency.
"It's been a big hit with patients. You can use it on your phone. You can use it wherever you are," she said. As a result, the hospital's "financial counselors aren't seeing so [many] incoming phone calls. I think that's really enhanced consumer experience. It's much more convenient. You don't have to call and wait for a phone call back or wait 24 hours until we get back to them."
Mobility in the digital transformation of payment is key to empowering a growing segment of revenue flow for hospitals: millennials.
"At 20 years old, the millennials are shopping very differently," the corporate director of revenue transformation strategy at the 93-hospital system said. "They want drive-by healthcare. They want convenience. For them, mobility is everything. We need to really address that market as a priority," he added.
Look outside healthcare to recruit talent
Seeking talent outside of healthcare is one way hospitals can improve revenue cycle processes and the customer experience.
A clinical value analysis manager at a 48-hospital system in the South said her system began looking outside of healthcare for talent acquisition.
"We have people that we just hired in our sourcing department from the oil industry. They have a bigger perspective when it comes to negotiating. Instead of saying, 'It's always been done this way in healthcare,' they say, 'Why can't we negotiate this cost down?'"
Whether hospitals bring on quality assurance and quality improvement experts or representatives from the oil industry, fresh perspectives and creativity can spur new ways of thinking about digital payment and consumers' interaction with it.
Take a top-down approach to culture change
Ultimately, CEO empowerment is necessary for process improvement and establishing a culture oriented toward consumer empowerment, executives said.
One vice president of revenue cycle management of a 304-bed hospital in the Southeast said CEOs "have to set the culture." A CEO must be "open and [have] the willingness to take risk."
CEOs can drive culture change, executives said, by ensuring patients are at the center of all their operational decisions.
"Technology is there," the vice president of revenue cycle services at a 137-hospital system in the South said. "We as leaders of our organization have to make a decided effort that consumers are going to be our focus. That is how we are going to drive change."
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