Pay For Performance - Retail Model

Transcription

1 December 2007 President and Chief Executive Officer

2 Many providers are grappling with a new acronym in the healthcare dictionary: P4P or Pay for Performance. This acronym marks the start of a national phenomenon of attempting to measure and improve quality of care. The current test provided by CMS allows for a premium of up to 1.5 percent above fee schedules for qualified procedures whereby certain quality measures are provided in the billing process. P4P has a long way to go as many billing processes are struggling to accommodate these new codes that are not recognized by many practice management systems, clearinghouses or payers. Nevertheless, the phenomenon of payment for quality of care will undoubtedly continue in various forms. But now a new acronym carries equal weight in this nascent era of consumer and employer-driven healthcare. The acronym is R4R or Ready for Retail. While R4R is a new paradigm in healthcare delivery, providers have been searching for alternative, ancillary revenue streams for some time and have set the stage for some of the current retail models. Healthcare has been spawning closet retail businesses for decades with many providers dabbling in optical shops, elective surgeries, wellness programs and even medical supplements. We are even seeing combinations of chiropractic and orthopedic disciplines in the same practice. Now, the quintessential new healthcare model is being delivered by Wal-Mart. The world s largest retailer has opened over 78 retail healthcare centers within its stores to accommodate primary care services and $4 prescriptions. Early results from the Wal-Mart healthcare initiative indicate high customer satisfaction and effective care. Consumer directed healthcare will continue to fuel the transition to a retail delivery model as patients will have an ever-increasing, direct participation in the payment cycle. Regardless of your position on Wal-Mart, their influence in healthcare should not be taken lightly. There is no doubt that healthcare is moving toward a retail delivery model. All providers must begin taking steps toward a retail orientation. The following are characteristics of retail that healthcare providers must take into account. Low cost of collection Payment expected at the point of service No or limited wait times Attractive geographic location Complete service experience Consistent brand identity Low Cost of Collections and Payment at Point of Service Due to the high collection rate at the time of service, the cost of collection for a retailer is very low relative to the current and future cost of collections for healthcare providers. Most retailers cost of collection is simply the discount rate paid to a credit card company and the float cost associated with the check clearing process. Due to third-party insurance, complex allowables and fee schedules, it is not anticipated that medical providers will enjoy a retailer s cost of collection. However, there is significant room to reduce the current estimated healthcare cost of collection from 20 percent of the benefit provided. Here are strategies to manage this retailer requirement. Collect co-payments at the time of service period. Estimate the allowable for each payer and collect 20 percent of the allowable at the time of service. Provide point-of-service charge entry to close an appointment encounter. 1

3 Investigate the viability of pre-surgical deposits of $250 to $500 depending on the specific cases and associated allowables. Implement solid pre-registration and appointment scheduling processes to ensure patients are aware of their financial responsibilities prior to the visit. Good customer service means no surprises! Provide clear patient statements for the self-pay portion of the bill to encourage payment. Have digital copies of the patient s Explanation of Benefits available at the front desk to facilitate over-the-counter collections. Utilize technology applications for appointments, pre-registration activities and self-pay activities. Utilize merchant credit services, bank lock boxes and Explanation of Benefits images at the front desk to accommodate payments and ensure good, clear customer service. Train the entire practice on the point-of-service collection process. Prevent bad customer service by engaging all participants prior to the date of service. Implement an overall process reporting system (CPT denials, allowable analysis, charge lag, unreconciled payments, pass through rates and reject rates) to identify areas for reducing cycle times and improving collections. Limited Wait Times The retail industry has mastered the art of managing customer wait times. Consumers today do not have any tolerance for waiting. People are struggling to manage their time and will not wait for medical providers unless they cannot pay or the quality of care is unmatched. Retail-oriented medical providers must be sensitive to these wait times. In a retail environment, the customer is the most important person. Historically, the healthcare industry has designated the physician as the most important person in the process. It used to be a badge of honor to have a full schedule, a long waiting list and appointments booked well in advance. But long delays in seeing patients will result in higher no show appointments (greater than 4 percent of total visits) and patients moving to alternative providers in their insurance books. A practice can quickly lose its stream of new patients which fuels the growth of procedures and additional established patient exams. Even if patients are willing to wait a few weeks to see the best provider, they might be reluctant to spend their dollars on services delivered an hour or more later than scheduled. What can a provider do? Re-think scheduling templates. If you are not using a schedule template, then review and implement it as a priority to ensure the right patient mix is being seen at the right time. Utilize a bundled visit technology that allows for various testing equipment to be scheduled at the time of service and combined with an office visit. These bundled appointments will consolidate the equipment and professional charges upon charge entry and discharge. Ensure the practice management system updates the patient status as arrived when checked in at the front desk and provide a report of arrival time by physician and location. 2

4 Hiring. They hire well since they understand the personalities and experience that provide a new hire with the best chance of contributing to high levels of customer satisfaction. Training. These companies continually train using scenarios that build consistency in the response and responsiveness of their staff. Training is daily and the mentoring process is continuous. Consistency. Consistency is a cornerstone in building trust with customers. Trust is the foundation of any business model. Consistency simply means that customers or patients have few surprises in their service experience. It means meeting scheduled appointment times, managing patient responsibilities in advance of the visit and meeting expectations at the time of service. 3 Measure wait times regularly and alter the patient flow and schedule to reduce these times to an acceptable level of less than 30 minutes. Patient satisfaction is directly correlated to meeting expected wait times. Location, Location, Location Retail is consistent with most real estate concepts whereby location accounts for the first three key ingredients in a successful project. Most healthcare providers are less sensitive to location due to their aggregation in and around medical centers. While location may not be as much of an independent decision for healthcare providers as it is in retail, geography will impact the patient mix, payer mix, and demand for services. For example, an industrial area will not generate many elective surgeries. However, an industrial area will generate a growing amount of employment screens, orthopedic and primary care services. In addition, the medical provider s office and surroundings will make a statement to the patient in terms of the practice s success, quality of service, or demographics served. Choice of neighborhood, drive-up appeal, physical layout and decor convey more to patients than a provider might be aware of or desire. An office with an over-zealous interior decorator will cause patients to wonder how much they are overpaying. An office that is not in a good area or looks dated will generate paranoia that the practice and providers are not up to speed on the latest medical procedures. However, a clean, efficient office will always provide a positive impression. With consumers paying larger portions of their healthcare bills, they are becoming more aware of the convenience, condition and environment of the treatment process and its place of service. If the office and location are not optimal, the practice can focus on other factors such as timeliness of the appointment, lack of surprises at the front desk and consistency of service. A parking token, coffee or doughnut can help a practice transition the office and location while minimizing any adverse impact upon patient retention. Your front desk is more important now than ever in the patient s perception of your practice. Complete Service Experience When people think of service, they think of companies like Nordstrom or Four Seasons Resorts where the customer is the most important person in the shopping experience. This high level of customer service comes from solid hiring practices, lots of training and consistent management. How do these companies accomplish a better customer service experience?

5 A few questions for a medical practice about its customer service experience: What are the personality traits and type of experience that make a good employee at your practice? Can you visualize the best new hires for your practice? Do you wonder or try to influence what your patients think about their experience with your practice? What patient behaviors do you want your patients and employees to exhibit before, during and after the patient visit? The Complete Service Experience for Nordstrom and the Four Seasons does not mean the customer is always right or perfect. It also does not mean that these organizations are sacrificing profits for customer service. In fact, the opposite is generally true. Higher customer satisfaction usually means higher profits relative to competitors. Consistent Brand Identity A brand embodies the set of beliefs held by customers or prospective customers about you and your service. Most healthcare providers build their brands on the physician-patient relationship at the expense of the factors discussed above. Focus on brand is critical in a medical practice s evolution to R4R. Most consumers are not attuned to the finer clinical details of their healthcare experience and therefore expect and trust the analyses and medical decision-making is relatively good. However, all consumers are cognizant of their traditional retail experience in a medical office. R4R is a measure of how well a practice establishes the trust relationship with its patients. The balance of consistency and accountability among the physician, office staff and patient are necessary to build any brand identity. When patients leave your office, what do you want them to think about you? Summary While P4P is gaining the lion s share of the healthcare headlines due to electoral attractiveness of healthcare reform, R4R may be a larger and more silent trend which will impact healthcare providers even more rapidly. Consumer and employer-driven healthcare will require a transition from the current healthcare delivery models to alternative, retail-oriented models. A retail orientation for a medical provider means new strategies to lower the cost of collection, improve customer satisfaction review the overall patient experience beyond the treatment room, and formulate brand identity. Today, healthcare is evolving toward the power of the consumer and medical providers must embrace this change to survive both P4P and R4R. 4

6 President and Chief Executive Officer John Thomas has been with MedSynergies since its inception in 1996, when he began as senior vice president and managing director of development. While at MedSynergies, Mr. Thomas has held positions such as senior vice president and chief financial officer, and has been a member of the board of directors since Prior to joining MedSynergies, Mr. Thomas was the vice president of the newly formed HealthCare Finance Group for Bank One. He was also the assistant vice president for Texas Commerce Bank, where he focused on hospitals and emerging healthcare markets. About Now serving 2,300 healthcare providers in 27 states, MedSynergies provides revenue cycle services and integrates leading software programs into the daily operations of healthcare organizations. Founded in 1996, MedSynergies serves physicians in hospitals, specialty medical groups, ambulatory surgical centers, rehabilitation centers, and independent practice associations (IPAs). Based in Irving, Texas, the company has regional offices across the United States. For more information on MedSynergies, please visit Mr. Thomas is a national speaker on topics such as revenue cycle management, billing and collections processes, capitalization, and turnarounds. Mr. Thomas received his Master of Business Administration, with honors, from the University of Texas Graduate School of Business. While at the University of Texas, he focused on finance and management and was selected as the Sword Scholar and received the Dean s Academic Award. Mr. Thomas received his Bachelor of Arts from the University of Arkansas Corporate Drive Third Floor Irving, Texas Copyright 2007 No reproduction, in whole or part, without written permission.