Industry experts agree that the energy, creativity and collaboration that drove healthcare’s rapid response to the COVID-19 pandemic will also fuel the industry’s recovery. Leveraging technology to meet the new demands of a financially stressed patient population, health systems and hospitals have the opportunity to improve their operating performance and restore their financial health.
Well before the $3 Trillion American health system was brought to its knees by the COVID-19 outbreak, many healthcare providers were already struggling financially. A just-published report from Bloomberg titled, “Virus pushes America’s hospitals to the brink of financial ruin”, finds that “America’s already-ailing hospitals are being pushed even further into financial ruin, threatening to force a growing number of them to file for bankruptcy or even close.”
The report goes on to describe how even larger, financially stable health systems like HCA Healthcare Inc. and their investors have been affected in this uncertain environment. In their fourth quarter earnings call, HCA leaders announced the withdrawal of guidance for the rest of the year, suspending quarterly dividends and share repurchases. Also announced was a three-phased “reboot”, a sequence of management actions labeled: response, restart and recovery. The company’s CEO, Sam Hazen, said, “We will get back to normal in time, but we realize it may be a new normal.”
The three-trillion-dollar question, of course, is what will healthcare’s “new normal” look like?
We believe the question is already being answered in part by the innovative adaptations healthcare providers have made to respond to the COVID-19 crisis, and the willingness of healthcare consumers to embrace new and different ways of engaging with their providers. Digitally-empowered patient engagement offers the scalability, flexibility and outcomes that hospitals and other providers must achieve in order to recover financially from the COVID-19 crisis.
Case in point: CVS Healthcare, which early this month reported a 600% surge in use of its retail health clinics via telehealth during its first-quarter earnings call, with “net income jumping 41 percent compared to the same period a year ago. The boost in profits and sales comes as CVS converts hundreds of its more than 9,800 retail locations to HealthHub locations with new healthcare services…as well as additional services at its MinuteClinics.” The report goes on to observe that, “The move to add new healthcare services comes as rival retailers in the healthcare space like Walgreen Boots Alliance and Walmart look to fill the emptying space in their brick and mortar stores in the face of changing consumer shopping habits driven by online retail giant Amazon and others.”
Healthcare consumers’ expectations for healthcare were already changing before the crisis, a topic we explored at some length in an article titled, “We The Patients: Consumerism, Convenience & Technology.” Now, personal health concerns, social distancing and stay-at-home rules have served to accelerate and expand the pre-crisis trend toward more convenient and affordable care. As a result, the trend toward more digital patient engagement and alternative care delivery settings has taken a steep turn upward.
Healthcare financial experts agree that healthcare’s changing economic landscape requires a commitment to sustained innovation. Writing for the Healthcare Financial Management Association (HFMA), Deirdre Baggot, PhD, RN; Bruce Mamory, MD; John Rodoy, PhD and Dan Shellenbarger, recently published analysis titled, “The journey back from COVID-19: A guide to economic recovery for health system CFOs”. In it, healthcare providers are urged to embrace a number of business practices to achieve or restore their organization’s financial health.
These Critical Strategic Decisions include:
- Don’t squander the opportunities resulting from the crisis. Empower critical problem solving and decision making throughout the organization in order to sustain the nimbleness and creativity stimulated by the crisis.
- Make smart human capital choices to shape an optimal workforce for the post-pandemic future.
- Proactively restore lost revenue and work with payers to unlock new sources of value.
- Avoid scattershot cuts, target the sacred cows and reimagine the cost structure.
- Invest smartly to preserve partners and build a system that will thrive after the pandemic
Critical Innovations to Optimize Performance of Hospital Patient-Pay for COVID-19 Recovery
As mentioned above, CVS’s and others’ success growing telehealth enterprises is attributable in no small part to the success of Amazon and other major online retailers. Simply put, we as consumers are more than comfortable doing business online. With COVID-19, many of us actually now prefer it. That’s why, as a category, “Retail Health” is uniquely positioned to seize the advantages of digitally-delivered healthcare and its efficiencies, scalability and personalization to drive revenue and earnings growth.
This accelerated change in consumer sentiment represents an opportunity for hospitals as they plan their post-COVID-19 financial recoveries. For the purpose of this analysis, we’ll focus on our area of expertise – patient-pay revenue cycle, a domain that we believe is ripe for innovation as patients look for rewarding digital experiences and providers seek ways to responsibly cut costs and restore revenues.
A hypothetical timeline describing the healthcare journey of one patient provides an illustration for how digitally integrated, revenue-optimized care delivery might work:
- The individual is experiencing symptoms and wonders about seeking care. To begin with, there is a very good chance that – even at this early stage – the prospective patient is already thinking about whether they can afford the out-of-pocket. At this stage, the consumer reviews projected cost estimates online and compares them to other providers in their area. The provider with the best value (excellence + price) is selected and an appointment is scheduled online.
- The consumer (now a patient) receives a text message that their appointment is confirmed, with details for how to prepare for their visit to ensure their personal safety. The same system is used to notify the patient if there are any changes and is adjustable to the patient’s channel of choice – email, phone (via Interactive Voice Response), even paper.
- The patient receives a diagnosis and proposed treatment. At this stage, a more defined pre-treatment cost estimate is made available to the patient, either by hospital admissions staff or direct online on a safe, personal patient portal. At this stage, the system’s data-driven patient segmentation capabilities generate multiple payment scenarios for the patient’s consideration. These may include discounts for early or prompt payment, short-term interest free payment plans, or longer-term plans financed by reputable third-party lenders.
- The patient selects and agrees to a payment plan, storing their preferred tender type (credit card, Apply Pay, PayPal, checking, savings and others). Treatment commences. If the patient is prepared to pay their estimated balance, they do so with just a click.
- The patient is in recovery and billing has begun. Here again, the clinical and financial dimensions of the patient’s care experience are integrated so the patient is delivered a single presentation of all their financial obligations. Instead of getting five bills from the anesthesiologist, radiologist, physician, hospital and physical therapist, they get one “bill”. It’s easy to understand and easy to pay. Throughout the care journey, patient communications align with patient preferences and are personalized to optimize deliverability and patient behavior outcomes.
Throughout the patient care journey, the experience – clinical and financial – aligns with modern consumer expectations while meeting provider requirements for cost containment and scalability without compromising on care or quality.
Through our strategic partnership with Parallon, Loyale Healthcare is proud to be the patient financial engagement platform for HCA Healthcare. As we work with our clients to overcome the many challenges posed by the COVID-19 crisis, we are inspired and encouraged by the ingenious ways new and existing technologies are being leveraged to create healthcare’s “new normal”. We are grateful to be a part of it.