Though the Center for Medicare and Medicaid Services’ updated Star Ratings and proposed rules on hospital price and quality transparency may be clumsy, even ineffective, their intentions are clear. The largest source of revenue to hospitals in the U.S. is setting a new, much higher bar for the way hospitals and payers help patients find and choose care.
It is impossible to overstate CMS’s influence on the healthcare industry. As the single largest payer for medical services in the United States, no other payer comes close to matching the clout and regulatory authority wielded by this federal agency. Under the current administration, CMS has consistently challenged the industry, proposing rules to deliver more consumer-friendly information and experiences to help patients find and choose the care and caregiver that’s right for them. That includes information about price and quality.
CMS’s emphatic focus on patient consumerism was the subject of a recent Loyale Healthcare article. In it, we acknowledged CMS’s intentions and supported the industry’s assertion that the rules as proposed do far too little to provide patients with clear, useful information to make finding and choosing care easier or more affordable. But…though CMS’s methods may be clumsy, even ineffective, their goals are clear. Health systems and hospitals, we believe, must find better ways to deliver the experiences that CMS - and patients - are demanding.
In an announcement made just last week, Seema Verna, Administrator for the Centers for Medicare and Medicaid Services’ (CMS), introduced updated hospital quality information including star ratings on CMS website Hospital Compare. The announcement reinforced what Ms. Verna and the current administration have described as “a single-minded focus on patients”. Specifically, providing patients with the quality and price information they need to be more active - and more successful - consumers of healthcare.
Setting a Higher Bar for Consumer-Friendly Performance
CMS’s pursuit of its healthcare consumerism agenda, though relentless, is in flux. Their updated star ratings for 2020 reflect existing methodology for scoring hospitals according to a variety of quality metrics, such as infection control, value of care and unplanned visits. But the announcement makes clear that this methodology will be changing - and changing soon. That’s likely to mean that health systems and hospitals who have grown comfortable with their high star ratings may be in for some surprises. It certainly means that 1-, 2- and 3-star hospitals will now be faced with an even higher performance threshold.
CMS’s approach to consumerism has been tenacious to say the least. In August of last year, they announced that they planned to propose rule updates that would affect its scoring methodologies in the spring of this year (2020). CMS expects that its new rules will be finalized and adopted in 2021. One such rule is a new federal mandate requiring hospitals to publish payer-negotiated prices or face fines for noncompliance. Hospitals and their industry groups have responded negatively, filing a lawsuit that charges the new rule is “unlawful”, But CMS is not backing down.
In an appearance at the Forbes Healthcare Summit late last year, Ms. Verna pushed back on healthcare executives, asking “Is it can’t do it, or won’t do it?”. She went on to say that, “People are asking for price transparency. People are frustrated and that’s why we’re hearing calls for Medicare for All.” Ms. Verna added that hospitals are “hiding behind” the argument that payer-negotiated rates would confuse patients concluding, “Let’s just put it out there. Let patients determine what they need. Give them the ability to shop around.”
Forging a Better Path to Success in a Consumer-Driven Healthcare Marketplace
Healthcare’s patient-consumerism destination is clear. It can best be described using CMS Administrator Seema Verna’s call for more stringent, transparent quality measures and for price transparency that gives patients “what they need.” Through their proposed rules, CMS has offered one path toward that destination. What is equally clear to us is that hospitals should worry less about CMS rules and focus instead on other, more workable paths.
At Loyale Healthcare, we’re privileged to work with innovative healthcare providers whose patient-consumerism strategies were ahead of their time and CMS rule-making. Partnering with companies like HCA Healthcare, we’re empowering hospital staff with tools that make it easier to help patients understand and afford their care. And our patient-facing technology is attracting record numbers to personalized self-service that looks and feels like a favorite app. Consequently, patient satisfaction is up, costs are down and growth is accelerating.
Usually, these healthcare providers are motivated by a desire to improve their patients’ experiences. Most recognize that their patients are unhappy with their financial experiences, so their work with us focuses on this important dimension of care. Patients are frustrated and confused by their financial and billing experiences, something we explored in the article, “A Concept Whose Time Has Come: One Bed-One Bill”.
But patients respond enthusiastically when the financial implications of care are easy to find and understand. For example, by being presented with a cost estimate upfront, before treatment takes place, then offered multiple payment scenarios to help make paying more affordable. And finally, with easy-to-understand consolidated bills, and personalized digital communications that make billing and collections comfortable - not confrontational.
Taken together, this consumer-friendly financial experience improves access because it improves affordability. It improves patient-pay portfolio performance because it leverages data to optimize financial outcomes for both patients and their caregivers. Most importantly, because it integrates with the patient’s clinical portal, it gives patients the most complete picture imaginable of their overall care experience in every dimension.
A Framework for Healthcare Consumerism
Using our clients’ experiences as a model, a hospital’s or health system’s consumerism strategy framework should include the following elements, in sequence…
- Define the goal using CMS’s stated outcomes as the target (or better if you’re ambitious). Remember, the point is to focus on achieving CMS goals, not merely complying with their rules. Do it better than their rules mandate.
- Fix a date or date range for the achievement of the goals.
- Secure executive sponsorship and dedicate appropriate personnel with authority and budget to the initiative.
- Determine if it will be an enterprise-wide or phased solution.
- Conduct a thorough analysis to identify the gaps between where you are today and your goals and dates.
- Define a project for every gap that must be addressed, with a project plan unique to each element.
- Determine whether you intend to build or buy, with a close eye on risk-shared technology partnerships that demonstrate high levels of interoperability to solve multiple problems at once. We explored these innovative partnerships in a recent article.
- If partnering (buying), identify finalists. If at all possible, design a Champion-Challenger experiment in a pilot program to: 1) test the cultures and capabilities of each prospective partner, and 2) determine which technology team is most willing to adapt to your ecosystem and longer-term plans
- Based on the pilot test, choose a vendor and schedule deployment.
Regardless of the discipline - clinical, administrative or financial, this loose framework provides a solid basis for the visualization and management of any transformational initiative focused on creating a more consumer-friendly care delivery model.
Fortunately, based on our experiences, many of the “parts” needed to assemble a high-functioning patient financial engagement platform are probably already in most hospitals’ ecosystems.
At Loyale, we share the healthcare industry’s skepticism about CMS’ proposed rules. At the same time, we can’t help but acknowledge the facts: CMS is relentlessly determined to make healthcare more transparent and consumer friendly. Patients are avoiding care because of concerns about cost. Those who get care are often slow to pay or end up not paying at all. As it is, the system is failing.
But by setting our sites on a shared objective, and choosing the roadmap that works best for each setting, we believe the industry will make the transformation. And that every stakeholder will be better off for it.