The Center for Medicare and Medicaid Services (CMS), Healthcare Financial Management Association (HFMA) and U.S. Congress among others are calling for improved transparency, better access and an end to aggressive healthcare collection tactics. Physicians are joining the chorus, with a sobering take on the health-related impacts of unaffordable care.
Linking Medical and Financial Quality
In a Viewpoint published by the Journal of the American Medical Association’s JAMA Network, in early February, 2020, two physicians from Johns Hopkins University called for the establishment of quality metrics in the area of patient billing. In “Billing Quality is Medical Quality”, Simon Mathews, MD and Martin A. Makary, MD, MPH make a compelling clinical case for the establishment of financial metrics as part of any hospital’s overall quality measurement matrix.
Pointing out that “High medical prices and billing practices may reduce public trust in the medical profession and can result in the avoidance of care,” Doctors Martin and Makary have diagnosed a large and growing problem for healthcare providers and their patients. Specifically, that out-of-pockets costs are affecting Americans’ healthcare behavior and that higher objective standards are necessary to ensure that price (cost) does not represent a barrier to care - regardless of where that care is sought.
Loyale Healthcare and others have written extensively on the predicament patients face as they deal with higher deductibles and co-pays, not to mention average annual household healthcare premiums that passed $20,000 just last year. Research cited in the article referenced above, found that 64 percent of patient survey respondents reported delaying or avoiding medical care in the last year because of concerns about high medical bills (especially after insurance).
The negative implications of this phenomenon are far reaching for patients, providers and communities. Patients suffer with financial obligations that are difficult to impossible to meet; providers face suppressed patient demand and higher incidences of acuity due to delayed or neglected treatment; and populations suffer due to the inadequate provision of preventative and pre-emergent care. In other words, no one wins.
The problem is compounded by the fact that financial information and experiences differ so dramatically from provider to provider, and even setting to setting. Neither patients nor providers have a consistent means of communicating, understanding or settling financial obligations in ways that allow patients to get the care they need and for providers to more reliably secure the payment they require.
Noting that “the financial harm of medical care should not be separated from the clinical consequences of care, because both outcomes can have a major influence on the health and well-being of patients”, Drs. Mathews and Makary have proposed possible metrics for assessing billing quality, what we at Loyale call “patient financial engagement”. These five key metrics follow:
- Itemized bills - Are patients routinely provided and itemized bill with items explained in plain English?
- Price Transparency - Are patients provided real prices for common “shoppable” services when they ask?
- Service Quality - Can patients speak with a billing representative promptly about a concern they have about their bill and be informed of a transparent review process?
- Suing Patients - For patients who have not entered into a written agreement specifying a price for a medical service, does the institution sue patients to garnish their wages, place a lien on their home or involuntarily withdraw money from a patient’s tax return?
- Surprise Bills - Are out-of-network patients paying out of pocket expected to pay more than the region-specific reference-based price? Are patients billed for complications stemming from National Quality Forum serious reportable events?
At least two of these metrics, price transparency and surprise bills, are directly addressed by rules proposed by the Centers for Medicare and Medicaid Services (CMS) and/or pending legislation at state and federal levels. As we explored in an earlier Loyale Healthcare article, these are hot button issues for legislators and regulators because they’re hot button issues for their constituencies.
The other three metrics: 1) itemized bills patients can understand; 2) service quality (access to suitable financial help and guidance); and 3) suing patients, speak to an important but seldom mentioned issue in the area of patient financial engagement - the importance of recognizing the significance of a patient’s financial experience within the context of their entire care journey. With respect to suing patients, the authors state plainly that, “Suing patients over unpaid medical bills is a violation of the core mission of hospitals, which is to be a safe place for individuals with any illnesses or injuries and to care for patients regardless of the situation.”
Walking the Tightrope - Patients, Providers and Higher Quality Patient Financial Engagement
Like others in and around the healthcare industry, Doctors Mathews and Makary are calling for better patient financial experiences. Experiences that are characterized by transparency, clarity and humaneness. Few would argue that these are not admirable goals, but what about providers? How are they supposed to operate in an environment that allows patients to shop based on cost and quality? How are they supposed to manage ever increasing un- or undercompensated care? Their costs are going up. Their margins are thinning, and there’s a slew of new and emerging competitors threatening to steal market share.
Fortunately, there is some good news for providers. Based on our direct experiences working with companies like HCA Healthcare, our analysis confirms that improved patient financial experiences can lead to better provider financial outcomes. These come in the form of reduced costs, made possible by process automation and patient self-service; and in improved patient payment behavior, which is achieved by engaging with patients in a conversation about what they can afford, instead of a confrontation about what they owe. Additionally, better financial experiences enhance provider competitiveness, something that has never been more important.
The calls for improved patient financial experiences are coming from every corner. Patients, regulators, payers, employers - and now physicians - are demanding more transparency, more compassion and better choices. Here at Loyale, we’re proud to help health systems and hospitals meet that new high standard.