Price Transparency, Consumerism Top Issues for Healthcare Execs

September 23, 2019 - Leaders from payer and provider organizations are developing strategies to address rising healthcare costs in 2020 through price transparency and more consumer-focused initiatives, according to HealthCare Executive Group’s newest Top 10 report.

In this year’s report, the group of over 100 healthcare executives from leading healthcare organizations ranked costs and transparency as their number one issue and opportunity in the coming year, followed by healthcare consumerism and delivery system transformation.

Rounding out the Top 10 list were data and analytics, interoperability and consumer data access, holistic individual health, next-generation payment models, accessible points of care, healthcare policy, and privacy and security.

The top 2020 focus areas are not necessarily newcomers to HCEG’s Top 10 report, but the top issues have not always been ranked so high. Last year, for example, healthcare executives prioritized data and analytics capabilities and price transparency was just a concern associated with the organization’s digital transformation, which ranked fifth that year.

Value-based payments have also dropped from HCEG’s Top 10 compared to previous years. In fact, this year’s report did not even contain the words “value-based.” Instead, executives opted for next-generation payment models and delivery system transformation.

READ MORE: Healthcare CFOs Look Forward to Value-Based Care, Consumerism

But these shifts, including the increased focus on price transparency and healthcare consumerism, shouldn’t come as a shock to the industry, HCEG’s executive director Ferris W. Taylor said.

“HCEG member organizations express that the demand for, and pace of change and innovation is accelerating as healthcare has moved to center stage in the national debate. It shouldn’t be surprising that costs and transparency is at the top of the list along with the consumer experience and delivery system transformation,” he stated in a press release.

RevCycleIntelligence.com caught up with Taylor to explore what has changed for healthcare executives in the past year and how they are responding to major trends, including price transparency, value-based care, and healthcare consumerism.

Addressing the ‘affordable’ in Affordable Care Act

Healthcare organizations have undergone significant change since the implementation of the Affordable Care Act (ACA) in 2010. The law and subsequent legislation have enabled hospitals and physician offices to digitally transform their workflows through certified EHR technology.

“That has changed the priorities and the focus of healthcare,” Taylor stated in an interview.

READ MORE: Going Above and Beyond the CMS Hospital Price Transparency Rule

With the use of health IT, organizations have been able to streamline processes and arguably improve care delivery, which has allowed providers and payers to achieve one of the ACA’s goals: enhancing accessibility of care.

Now is the time to address the main objective of the ACA: affordability of care, Taylor argued.

“We haven't really addressed affordability,” he elaborated. “Premiums have continued to go up. Deductibles have gotten higher and higher. Costs have continued to escalate. That undercurrent is finding its way to the top of the list.”

Healthcare organizations must respond to rising patient costs or face the consequences, which include but are not limited to slower patient collection times, higher A/R days, and in some cases, non-payment for services. As patient financial continues to increase – and it has by 12 percent in 2018, the most recent year for which TransUnion had data – addressing costs and transparency from a consumer perspective is a must for executives, Taylor stated.

“The consumer is stepping back and saying, ‘Underneath all of this, I just can't afford the healthcare system,’” he said. “What I heard at our forum was, ‘We can do better.’ There are things that we can do to address cost and to not just impact the increasing prices that are taking place, but actually find ways to lower costs.”

READ MORE: Best Practices for Value-Based Purchasing Implementation

To achieve their cost transparency and consumerism goals this year, healthcare executives from payer and provider organizations are leveraging the capabilities they developed from last year’s number one HCEG Top 10 issue: data and analytics.

“We are seeing a much larger focus on digital technologies and taking advantage of the analytics, data, and the technology that is out there,” Taylor explained. “Those have changed quite dramatically in the last five years or so. Data is much more readily available and it’s broader than just administrative data. We now have clinical data, lab data, social, economic, and demographic data. The analytical tools also are much more sophisticated.”

By using data and advanced analytics tools, healthcare organizations are not only helping patients understand their costs through greater price transparency, but also assisting providers with reducing total cost of care.

Investing in supply chain analytics, for example, can save hospitals up to $9.9 million per year, according to consulting firm Navigant. Researchers at the 2018 World Medical Innovation Forum also all focused on how artificial intelligence can reduce high costs while improving care delivery.

“Today's technology allows us to step back and dramatically rethink how we deliver and at what price we deliver healthcare,” Taylor highlighted.

Technology is helping healthcare organizations address affordability of care, but executives should also be prioritizing delivery system transformation to address costs and transparency from a consumer’s perspective, he stressed.

Delivery system transformation and value-based payments

The term ‘value-based payments’ may not have made its way to HCEG’s Top 10 report for 2020, but the concept pervaded the current list of issues and opportunities facing healthcare executives.

“We've now recognized that we can't get to outcome-based healthcare without some major changes in other areas,” Taylor explained. “The list recognizes that we're starting to merge or to recognize that some of these top ten priorities are actually very intertwined. They connect with each other.”

Without more data and analytics tools, the industry can’t truly move to value-based care, Taylor elaborated. Similarly, healthcare organizations will need to upend their traditional systems and workflows to track medical interventions over time for value-based care success, he said.

Value-based payments are now a key component of the delivery system transformation issue executives identified as one of their top three opportunities next year, and the inclusion of value-based payments as part of the new focus area reflects how value-based care and consumerism intersect, Taylor explained.

Consumers and the healthcare industry are both seeking value. Through higher value care, all parties can lower costs, improve outcomes, and increase patient engagement and satisfaction, which are all goals of value-based payment models.

Healthcare organizations should be able to tell a consumer what the expected outcome of an encounter should be and how much the encounter will cost if the outcomes are achieved, Taylor elaborated. In that scenario, the patient walks away feeling engaged with the healthcare system, which can help providers and payers to deliver value-based care rather than sickness care.

Transforming the entire care delivery system from the moment a consumer accesses insurance to the point at which they pay their bill is the key to creating that scenario, he added. And according to the report, that will involve “operationalizing and scaling coordination and delivery system transformation of medical and non-medical services via partnerships and collaborations between healthcare and community-based organizations to overcome barriers including social determinants of health to effect better outcomes.”

Looking beyond the traditional healthcare setting will be a staple of delivery system transformation, Taylor added.

Looking out for disruption

Organizations may be looking to their communities to create a care delivery system that is value-based. However, executives should also be looking beyond their own backyard to bring affordability and value to consumers, Taylor stressed.

“We know what happens when Walmarts have healthcare right in the middle of the community,” he said. “That changes the delivery system and also lowers the cost, and not just the dollar costs of healthcare, also the convenience cost.”

External market disruptors like Walmart, CVS Health, and Amazon are interacting with healthcare consumers to change how health and well-being fits into everyday life, Taylor continued. The consumer-focused care delivery provided by these new competitors will be an issue for healthcare organizations who lagging with consumer-centric care. Research has already shown that consumers are willing to receive care in non-traditional settings, like retail clinics and their homes, for lower cost, convenient treatment.

Healthcare executives were concerned with external market disruption last year, ranking the area as the seventh top issue in the HCEG Top 10. But the item dropped from the 2020 list completely, which was a surprise to Taylor.

“Last year, it was a recognition that we needed to change more, and my hope is that that pendulum hasn't swung back in the other direction where we think healthcare is too complicated and non-traditional entities will disengage after finding that out,” he said. “I personally don't think that will happen. Change is really the definition of the future of healthcare.”

Payers and providers alike will need to change with the evolving environment to survive, he emphasized. And they will need to do it in a collaborative manner to create a truly value- and consumer-based system.

“If the industry doesn't come together in a more unified way and address costs and transparency from a consumer perspective, then the industry could be forced to change in ways that would not be advantageous to the consumer or the industry,” he concluded.