Healthcare Issues & Trends

Advice & Insights for healthcare's Leaders & HR Professionals

The Price Must Be Right with Healthcare Consumerism

Posted on September 29, 2015 by Gallagher Integrated

As healthcare organizations shift their sights towards clinical integration, it is important that their efforts address the ever-growing trend of price comparison in healthcare consumerism. Although technology integration and convenience of delivery are huge issues dominating the consumerism landscape, an often over-looked aspect of consumerism is the need for pricing transparency and competition.

In our most recent whitepaper, “A New Meeting Place: The Impact of Increasing Healthcare Consumerism on Clinical Integration,” we discuss how the need for pricing transparency and competition will impact organizations’ clinical integration efforts:

  • The Rise of Research: 56% of Americans have researched prices for healthcare services. Of that 56%, 21% believe that researching healthcare prices helped them save money and 7% say their findings influenced their choice of provider. And despite the fact that not all of that 56% say they believe researching saved them money, 82% say they will compareprices again.
  • Consumers and Quality: How do the issues of quality of care and price of care affect one another? They’re mostly on par, but it’s important for healthcare organizations to note that f a hospital’s quality is within one quality grade of another and there is a $1,000 price difference or more, consumers will more commonly choose one quality grade lower (but no more than one) if it will save them $1,000 or more.
  • More Than Millennials: It’s not just Millennials who are researching prices for healthcare services; as the adoption of HDHPs continues to rise year after year, many healthy 35+ year-old Americans with full-time employment have coverage through only an HDHP, which means the first $4,000 to $10,000 comes directly out of their pocket. Their goal is to not have to invoke that plan to pay—unless they have a “catastrophic healthcare event” in their lives.

Pricing competition and transparency is just one of the three major issues affecting the healthcare consumerism environment. For more about the other issues—and pricing competition and transparency—download the whitepaper today. 

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3 Consumerism Trends Healthcare Organizations Need to Know

Posted on September 22, 2015 by Gallagher Integrated

The era of healthcare consumerism is now in its second decade—and all signs seem to indicate that consumerism will only continue to dominate the healthcare landscape. With the knowledge that consumerism is here to stay, the question becomes: what can organizations do to stay competitive in this changing healthcare environment?

Across the country, healthcare organizations are shifting their sights towards clinical integration. It is becoming increasingly clear that consumerism must not be overlooked when it comes to any organization’s clinical integration efforts. In our most recent whitepaper, “A New Meeting Place: The Impact of Increasing Healthcare Consumerism on Clinical Integration,” we outline three strategic areas for healthcare organizations to focus on:

  1. Convenience of Delivery: Patients are giving up physician loyalty in droves, and they’re giving it up for one simple reason—convenience. Healthcare organizations now must compete with big-box healthcare options like Walgreens and CVS. Not only is this true for future patients, but also for current ones, who may utilize a MinuteClinic if their primary care physician can’t fit them in for an appointment as quickly as they would like.
  2. Pricing Competition and Transparency: As the rate of HDHP adoption continues to rise every year, Americans are beginning to spend more out-of-pocket on their own healthcare. This means that they are shopping, or price-comparing, their personal healthcare and looking for the best value. They want greater access to pricing (including online), and as these prices become more transparent, healthcare organizations will have to find ways to compete against one another for that business.
  3. Technology Integration: Consumers are more digital and mobile than ever. As Millennials begin taking a more active role not only in their own healthcare, but also their parents’ and grandparents’, healthcare organizations will need to provide new services in the digital and mobile space.

It’s easy to identify the three biggest factors in healthcare consumerism today, but it’s even more critical to identify actionable insights that healthcare organizations can utilize in order to affect important changes that will position them for profitable futures. Download the whitepaper today to learn more about the these three issues dominating the consumerism landscape and how healthcare organizations can use them in their clinical integration efforts.

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The Volume-to-Value Transition: Challenges Ahead for Healthcare Leaders

Posted on June 25, 2015 by Bill Jessee

Since the advent of health insurance, the driving force for revenues—for both hospitals and physicians—has been volume. The more services provided, the greater the revenue. But volume is no longer the sole marker of success. As healthcare organizations across the country begin to transition toward more value-based payments, the leaders of those organizations will face new challenges.

In our last blog post, we outlined some of the barriers to change that healthcare leaders will face as they strive to begin the transition toward value-based methods of care. But what challenges will they face after getting past those barriers and beginning to actually make the changes?

  • Creating a value-driven culture while still living in a volume-driven payment environment
  • Getting buy-in from board, management team, staff, and physicians
  • Integrating physicians and other clinicians into the organization
  • Aligning compensation and rewards with goals
  • Breaking old habits

For more insights about this trend that you can present to your organization (including how to navigate some of these challenges as a leader within your organization), download the full presentation for free. 

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The Volume to Value Transition: The Barriers to Change

Posted on June 18, 2015 by Bill Jessee

Healthcare organizations have already begun a transition away from volume-driven payments towards value-based payments, and it is predicted that many more will soon follow suit. In our last blog post, we proposed several key traits leaders will need if they are to effectively manage this volume to value transition: mission, vision, communication, motivation, and trust. These traits will become especially important given the numerous barriers to change these leaders will face.

Leaders embarking on the tall task of managing the volume to value transition need to be prepared for several roadblocks that will prevent change. These barriers include:

       Lack of accountability or managing care and cost of care

       Prevailing payment method is pay per unit of service

       Volume orientation of executives and physicians

       Psychological commitment to doing whatever is needed or wanted to care for patients, without regard for cost-effectiveness, efficacy, or quality of care

       High fixed costs—so hospitals need to keep beds filled and keep utilization of capital equipment high

       Inadequate data and systems

       No incentives for managing, maintaining, or improving patients’ health

       Little coordination of care

While substantial, these barriers are merely one piece of the puzzle, representing the initial challenges that will prevent many organizations from beginning to make this critical transition. Once an organization has actually agreed to shift towards more value-based payments, however, leaders will face new challenges.

In our next blog post (and the last in this series), we will discuss some of those challenges and how leaders can tackle them efficiently.

For more insights about this trend that you can present to your organization—or even just read on your own time—download the full presentation for free

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The Volume vs. Value Debate

Posted on June 4, 2015 by Bill Jessee

Historically, healthcare payments to providers have been based almost exclusively on volume—number of services, tests, days of care, procedures, and so on. In many areas of the country, however, there is a transition away from purely volume-driven payment to a system in which at least a portion of revenues is based on value of care (as measured by safety, quality, efficiency, and patient satisfaction.)

It is a reasonable expectation that this trend will continue and begin to affect even more healthcare organizations in the coming years. Managing this transition will require skilled leaders (more on that next week), but it will also require a comprehensive understanding of the circumstances that have led to this fundamental shift in thinking.

So what is so bad about the current system, where revenues are driven by volume?

  • It’s expensive and wasteful. Despite the high healthcare spending in the United States, we do not fare well on measures of population health, such as life expectancy. In other words? We get less than we pay for.
  • Certain groups are disproportionately—and negatively—impacted. There are significant racial disparities in both health and healthcare quality in the United States due, in large part, to volume-driven healthcare strategies.
  • Healthcare spending vs. GDP. A country’s per capita spending on health services is generally determined in large part by its Gross Domestic Product per capita. But the US is a major outlier from the curve, spending far more per capita for healthcare than one would expect given our GDP.
  • There are no incentives for quality or safety, which reduce risk. And conversely, volume-based systems encourage more interventions, which increase risk. Meanwhile, efficiency suffers.

All of these issues would be better addressed by value-driven payment systems, which keep people healthy and out of hospitals—all while discouraging waste and rewarding physicians for quality, safety, and efficiency.

In our next blog post, we will address the leadership qualities needed to manage this volume-to-value transition.

For more insights about this trend that you can present to your organization—or even just read on your own time—download the full presentation for free.        

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