Why ACA’s demise requires a fresh look at business practices

Under any scenario that Congress pursues, consumers will take on a growing percentage of the cost of their care, and providers will be under pressure to streamline operations.

Immediately after the 115th Congress of the United States was sworn in, Republican leadership of both houses began their move to dismantle much, if not all, of the Affordable Care Act, also known as Obamacare, which sought to bring health insurance coverage to more Americans.

I am not qualified, nor interested in exploring what we might see in the ACA’s place, but with that said, as the CEO of a company offering solutions that bring greater operational efficiency to healthcare providers, particularly in regards to patient payments, my interest ought to be apparent.

If we blow away the cloud of confusion surrounding the effort to do away with the ACA, one thing is clear: uncertainty. Despite all that’s unknown, it appears clear that consumerism will be a major part of healthcare’s future, according to Rep. Tom Price, who is the nominee to head the Department of Health and Human Services; Rep. Paul Ryan (R-Wis.) the majority leader in the House; and President-elect Donald Trump.

Hospital administrators should be concerned about whether their IT and finance systems are ready for this large shift to consumerism in the coming years. Because of the likely increased pay burden by patients and their families, an important question executives should be asking is, “How am I managing patient billing and collections, charity care and bad debt?”

The impact of the shift to consumerism is being felt by more than just the healthcare systems and providers. It is being recognized by those who invest in these organizations as well. Of late, the share prices of Community Health Systems, a network of hospitals serving mostly rural areas, and Tenet, one of the nation’s largest health systems, have declined in value. This underscores the financial risks being assumed by provider organizations that provide health services to rural communities—that’s because these groups are used to seeing a significant portion of their revenue come from insurance payments.

With the shift to the consumer—who, in many cases, is unable to satisfy their healthcare financial obligations—the risk to both the investor and the entity itself is obvious.

The last thing a hospital administrator should do is stick his or her head in the sand and wait it out. To do so is to place an institution on the precipice of operational disaster in the coming years.

Without question, quality of care cannot be diminished or corners cut in any clinical procedures, which will cause an entirely different sort of disaster. Instead, there is a compelling need to act now to make the business side of an institution more efficient, especially in the face of uncertainty.

Begin with simple things, like communicating with patients in a form they find friendly—increasingly, that’s electronically, not necessarily through traditional paper bills. Pressure from the uncertainty that pervades the early part of this year won’t be offset by antiquated revenue cycle management practices, yet most hospitals’ financial offices are characterized by mountains of paper and well-intentioned people pouring over ledger sheets, manually entering payments from insurers and patients into their information system.

Healthcare has been moving to a customer-centric business, and this transformation will likely accelerate. The industry has come to realize that the shift to consumer-driven healthcare has been accelerated with enactment of the ACA and the rise of high-deductible healthcare plans (HDHP). Hospitals saw their source of revenue shift, from almost entirely coming from health plans, to the current mix with 70 percent paid by insurers and 30 percent coming from patients. Based on the thinking of the emerging Republication majority, the percentage of the financial responsibility now sitting with patients is likely to go up even more in 2017.

Technology is available that enables completely automated reconciliation of patient payments received that does not post payments to the oldest balance due, but rather to the actual charges in the statement. Today systems will typically post to the oldest balance, which confuses patients even more—they think a bill has been paid, only to get another bill for the same amount the following month. Or worse yet, having people do manual reconciliation that’s time-consuming, error-prone and more costly than it needs to be. It is possible to improve efficiency while improving the customer experience.

To wait, to do little, or worse, to do nothing to improve your business operations’ efficiency in the face of uncertainty leads me to quote Elon Musk. He said “Constantly think about how you can be doing things better and question yourself.” The adage, “He who hesitates is lost,” is another way to suggest that you act decisively or face the consequences of inaction.

You, your hospital and your community can ill afford not to be doing things better.

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