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March 08, 2007
Hospitals Come to Grips with Informed Consumers Created by Health Savings Accounts
The hospital industry is slowly waking up to the new environment created by Health Savings Accounts and empowered consumers. In an interesting twist, the awakening is being led by the Healthcare Financial Management Association (HFMA), the trade group of hospital chief financial officers and other hospital managers.
Usually trade associations are slower to embrace change than the industries they represent, but HFMA clearly feels it would be negligent not to give its members a heads-up about the changing environment and suggestions on what must be done to respond to it.
Paradigm Change
An example is a January 2007 report, "HFMA's Healthcare Financial Outlook 2007," which includes a discussion of "Consumer-Focused Practices." The report warns, "This notion [patient as consumer] represents a radical shift in thinking for health care: that consumers, armed with solid information about cost and quality of services, will make more of their own informed decisions about how they will spend their Health Savings Account dollars."
Preparing for this change is important, the report says, "although it isn't likely to be easy."
The report quotes Joseph Fifer, CFO of Spectrum Health in Grand Rapids, Michigan and current HFMA chairman, as saying, "Truly embracing consumerism, for the benefit of the people we serve and for the long-term health of our own organizations, requires the right decisions for the right reasons. It requires us to move beyond rhetoric, resistance, explicit priority conflicts, and hidden agendas. It requires accepting that the old provider-to-payer paradigm no longer works. The convergence around the consumers is now, and we need to embrace it."
Wow! It is rare to hear from a visionary in the hospital industry.
Encouraging Signs
The report goes on to say, "Public indignation over the practice of charging uninsured patients the full list charges for services has also fueled demand that price information be more reasonable and easier to understand."
A sidebar explains, "As of November, 2006, the [American Hospital Association] reported 32 states had statutes requiring hospitals to report hospital charges or payment rates and six states had voluntary reporting initiatives."
But the report expresses understandable concern about sledgehammer approaches to these issues, quoting Terry Rappuhn of the Patient Friendly Billing Project as saying, "Price transparency needs to be allowed to bubble for some time, to allow local efforts to develop processes that work in individual communities."
The paper is also pretty good on quality transparency, noting quality isn't just about outcomes and procedures. "Patients are also interested in facets such as how long they had to wait, how clean the waiting room was, or whether the scheduler was polite on the phone," the authors write. They add, "when it comes to the realities of a competitive marketplace in which consumers [rather than clinical professionals] make the decision about where to go for care, customers' perceptions about their experience are often just as much a deciding factor."
Overall, a very encouraging paper. Let's hope the rest of the hospital industry will be willing to follow HFMA's leadership.
Learn everything you need to know about Health Savings Accounts at: http://www.health--savings--accounts.com
Posted by Wiley Long at March 8, 2007 02:42 PM