Aquina Blog

A study conducted by McKinsey revealed that due to the increasing costs of medical coverage, consumers are taking on more of the risk associated with health care, the traditional relationship between consumers, providers, and payors is changing.

Their analysis suggests that the vast majority (more than 74 percent) of insured consumers are both able and willing to pay their out-of-pocket medical expenses for annual liabilities of less than $1,000 a year.

However, the study revealed that the lack of financing options, inefficiencies in billing practices, and consumer confusion are all major drivers of non-payment of medical bills.

“37% of patients stated lack of financing options as
the main reason for nonpayment.”

Your industry is becoming more and more competitive. Retail clinics, telemedicine options, and other local practices can threaten your bottom line. One way to overcome this concern is to grow your practice size.

In fact, a recent report by MGMA states that larger practices tend to be more profitable than small practices.

A quick review of the data points to the fact that larger practices are also more apt to include medical and surgical subspecialties that can be supported by the practice’s larger base of primary care physicians.

This leads to the practice having the ability to provide more services which have greater complexity and generate greater amounts of revenue.

“As practices grow in size and production units increase, those larger practices have better
opportunities to decrease costs as they become more spread out.”

This is reflected in the data provided:

A recent study into the changing shopping habits of consumers has yielded some interesting insights. With the rising costs associated with doctor’s visits, it seems patients are now beginning to behave more like traditional consumers when shopping for any other professional service. It concludes people want healthcare that is more convenient, inexpensive, and of high quality.

Patients are no longer willing to wait for 3 hours to see a doctor. They expect to know what they’ll need to pay before service is provided, and they want easy methods of making those payments.  To stay competitive, practices need to anticipate and embrace these rising expectations.​

“26% of patients expect to speak with
a doctor within an hour”

While the majority of patients still prefer real-time interactions with providers, many are willing to use other methods if it’s more convenient or reduces wait time for an answer.

A recent story on NBC.com shared an all too common experience of an unexpected hospital visit for a young couple, the Raymans. As more and more people struggle to pay hospital expenses, a sudden medical emergency can break the bank. For the hospitals who provided the service, it can often mean going unpaid.

“77 percent of Americans cannot afford an unexpected
medical bill of $2,000 or more.”

Despite having health insurance, Rayman was hit with a $2,800 bill for surgery to have a golf-ball sized lump on his neck removed.

The family couldn't afford to pay the surprise bill right away. But they spotted a phone number for a payment program and were able to secure a 0 percent loan for 36 months.

A recent article in the Wall Street Journal explores the rapid rise of consumers and doctors turning to easier, faster and more convenient ways to meet - Telemedicine

Doctors are linking up with patients by phone, email and webcam. They’re also consulting with each other electronically—sometimes to make split-second decisions on heart attacks and strokes.

Patients, meanwhile, are using new devices to relay their blood pressure, heart rate and other vital signs to their doctors so they can manage chronic conditions at home. Telemedicine also allows for better care in places where medical expertise is hard to come by.

“35% decrease in patients’ average length of stay and
30% fewer deaths than anticipated.”

As a measure of how rapidly telemedicine is spreading, consider: More than 15 million Americans received some kind of medical care remotely last year, according to the American Telemedicine Association, a trade group, which expects those numbers to grow by 30% this year.

A McKinsey & Company report discussed a rising concern for healthcare providers, the concept of retail health. Rather than visiting a traditional practice, many patients are simply visiting clinics located in their local grocery stores or pharmacies.

 “2 out of 3 patients are more willing to use
retail services over traditional healthcare providers.”

The main reason is that the cost is typically lower due to employee health plans or out of pocket expenses. Similar services compare at $110 for retail and $166 for a doctor’s office.

The article suggests that while patients may not be seeing a doctor at a retail clinic, they’re typically seeing a nurse practitioner. Other benefits are wait times are almost always shorter and there is no need for an appointment. Retail health is becoming a more viable option every year. On average, there are 10 million visits in over 1,800 locations each year. That amounts to $1,952 in lost revenue for each primary care provider.

In a recent report from the Bipartisan Policy Center, which examines current issues in the delivery system reform effort, states that Centers for Medicare and Medicaid Services (CMS) can wield important influence as a health care purchaser.

The report goes on to suggest Medicare payment amounts can also form the basis of commercial payers’ negotiated payment rates and reimbursement approaches.

“CMS has shown preliminary success in shifting Medicare’s delivery
system into value-based care.”

 The agency has already met its initial goal of tying at least 30 percent of Medicare payments to quality performance or value-based arrangements by 2016 and remains on track to cross 50 percent by 2018.