Anesthesiology’s Big Business-to-Consumer Shift

By Dan Simile, Jr., CPA

Within the last decade, the anesthesiology industry has seen a steady increase in consumerism among patients, who are faced with a gamut of choices and decisions when it comes to the quality and price of their medical care. This trend is largely a product of new patient consumers “picking up the tab” with hefty out-of-pocket deductibles brought about by the Patient Protection and Affordable Care Act. Based on recent Kaiser Family Foundation research, average deductibles for covered workers have risen 12 percent, to $1,478 since last year. This means that anesthesiology practices need to put more effort into managing this new self-pay after insurance patient population to ensure a healthy cash flow.

The Transformation

Anesthesiology groups have traditionally operated in a business-to-business model where patients’ bills were paid largely by various government and private insurance payers. Anesthesiologists previously knew who to bill and what to expect in the way of payment from payers, but today’s payer landscape has been transformed as well. As patients have been encouraged to take responsibility for the value of their healthcare purchasing decisions, so too have insurance companies used the notion of “consumer-managedhealthcare” to shift the responsibility for payment to the patient by implementing high-deductible plans and health savings accounts. Currently, anesthesiologists findthemselves increasingly working in this new business-to-consumer model, and they need to transform themselvesand excel in their ability to connect, bill, andcollect from thousands of individual payers rather thanscores of corporate payers.

New Focus on Consumer Service

Billing and payment for anesthesiology cases are often overlooked aspects of the patient experience…and may be the reason that many anesthesiologists are seeing increases in patient complaints and their bad debt year over year. Confusing medical bills and frustrating collection processes can derail satisfactory clinical experiences in the hospital. Disgruntled patients unsettled by complex bills — then collection letters and poor interactive voice technology phone calls — are less likely to understand their financial responsibilities, and subsequently, less likely to pay on time or at all.

Therefore, the new post-reform environment has anesthesiologists on a more customer service-centric approach as they face mounting pressures to provide revenue cycle processes that are fit to meet patient consumer preferences. Tangible andeffective follow-up strategies are an absolute must foranesthesiologists to interact with today’s savvypatient-consumer, because as the role of the anesthesiologist continues to evolve, so too will the waythey handle payments.

To prevent the billing process from tarnishing patients' experiences, anesthesiologists must now focus on two principal strategies: managing patients' expectations upfront and empowering them to be more accountable for fulfilling their financial responsibilities.

Patient Payments Tie Into Patient Satisfaction

Anesthesiology practices rely on billing and collections to remain financially stable, but they may not be aware of the large impact that billing and collections have on their patient satisfaction scores or online reputation as well. In fact, when the Department of Health and Human Services decided to base 30 percent of hospitals’ Medicare reimbursement on patient satisfaction survey scores, they did not factor in the methods that were being used to collect payments from patients, nor the vast cultural and demographic differences that each hospital sees, and must contend with, in order to keep patients happy. A billing process can greatly increase a patient's frustration with the hospital, which we then tie into a patient's propensity to complain. Further supporting these issues, research suggests that 74 percent of satisfied patients paidtheir medical bills in full, compared to 33 percent of their lesser satisfied counterparts, thus provingthat patient dissatisfaction with financial processescan negatively impact satisfaction scores…and aninstitution’s bottom line.

Educate Patients, Improve the Experience

Anesthesiology practices must adopt a "help me help you" mentality when it comes to billing and collections. Whether they seek an external partner who specializes in securing patient payments or acquire the resources to enhance their own billing and collections department, interactions with patients should always be consumer-centric. In addition to providing the portals and tools for actually making payments, the key is to provide patients withall of the information necessary to understand what they owe and when payments are due. Clearly explaining the series of steps involved in the billing and collections process to patients upfront remedies any worries they might have regarding the payment process. This can be most useful if a time-of-service collection technology is used, for example. It also helps patients feel more in control of their healthcare experience because they will know what to expect when they receive their bills. That is why broader follow-up methods, such as claim-tracking status, online patient portals, interactive voice response technology and text messaging, are more effective. These are all consumer-driven events that many anesthesiology groups are ill-equipped to handle without procuring outside support. While not representative of the majority of the patient population, some patients are inclined to avoid paying their bills, and the increasing rate of HDHPs will exacerbate this problem. Therefore, it is imperative to be as vigilant in collections and follow-up efforts as possible. These "consumer-driven" modes of communication also help expedite possible discounts that can be awarded to patients, in turn helping speed up receipt of payment.

Conclusion

As the population of patients with HDHPs grows, the need to enhance the billing and collections process has become particularly pertinent. The evidence is plain; data shows a positive correlation between the increasing rate of HDHPs and uncompensated care, as well as patient complaints or requests for discounts. Anesthesiology practices can implement best practices to mitigate these trends in their billing and collections department, such as managing patients' expectations upfront and empowering them to be more accountable to pay their bills. Alternatively, groups can seek help from dedicated professionals trained to do it, since all of these changes in healthcare are fueling innovation with companies like Zotec, to develop payment solutions to meet the evolving needs of health care payers, anesthesiologists, and their patients. Anesthesiologists wanting to improve their patient satisfaction ratings, decrease bad debt, and gain an edge on the competition should create multiple traditional and non-traditional options to interact with patients, and especially taking into consideration the electronic and mobile demands of today’s patient consumers. Whatever the direction, it is essential to no longer just believe insurance carriers are going to pay for services rendered and ignore the third largest payer…the patient, which ultimately affects the bottom line.

Dan Simile, Jr., CPA is senior vice president with Zotec Partners, a leading national provider of anesthesiology revenue cycle and practice management.