BECAUSE HEALTHCARE “customers” don’t fit the conventional role of goods and services buyers, provider organizations haven’t made customer relationship management a priority.
But as consumers assume more financial responsibility through medical savings accounts, Medicare Part D doughnut holes, higher insurance deductibles and other self-pay mechanisms, hospitals are apparently starting to take notice.
“No question the consumer sector is growing and the fastest growing payer class is self-pay,” said Keith Maurer, Minneapolis-based Forthright’s vice president of healthcare solutions. “Salary.com reports that the percentage of employer plans with higher deductibles and co-payments will double next year.”
Indeed, with an escalating number of patients footing a greater financial share of their healthcare costs, the medical industry is – whether it wants to or not – becoming more retail-oriented, meaning hospitals must now think like a commercial enterprise with regard to customer relations.
The concept is giving rise to a movement commonly referred to as customer relationship management, or CRM. Software vendors like Pleasanton, Calif.-based Oracle are touting CRM systems as the engine hospitals need to effectively drive the various aspects of customer relations, including inquiries, scheduling, follow-up, billing assistance and account disclosure, as well as promising more sophisticated functions like telemedicine.
“The interesting thing about CRM is when you think about key trends in healthcare – escalating costs, the shift to outpatient care – consumers are becoming much more empowered,” said Marc Perlman, Oracle’s vice president of healthcare life sciences. “This means CRM is ripe for healthcare organizations to start adopting.”
While still in a nascent stage for the provider community, CRM is long established in other industries as well as in the payer sector, Perlman said. To customize the CRM concept for hospitals and other providers, he said Oracle is developing a system that goes beyond the “call center” basics.
“We’ve got a model right now that has CFOs excited,” Perlman said. “What we’re doing is creating a system that personalizes interaction and intervention, offers access to information, helps facilities utilize resources, lets patients go home with the right safety net and captures new sources of revenue.”
Oracle’s new generation CRM provides an infrastructure for transforming care, enabling providers to form virtual care teams “that enable organizations to truly be a medical home and focal point for those with chronic diseases,” Perlman said. CRM tools can furnish providers with a mutual care team that collaborates on critical aspects of patient care outside of the acute care environment.
“It’s a network of care,” he said. “So if something new comes out about asthma, they can share it. If a congestive heart failure patient gains five pounds, the care team can be alerted for an intervention. It goes beyond disease management into recruitment and community outreach.”
The catalyst for CRM to become mainstream among healthcare providers, Perlman said, is a change in mindset.
“Healthcare has to think differently – we call it the Oracle consumer vision philosophy,” he said. “Providers have to recognize the consumer revolution, that consumers are external and internal. They have to embrace consumerism and let that be their focus.”
Recouping collection dollars
A critical component of the consumerism movement is a greater emphasis on the patient to assume responsibility for payments. But because a sour U.S. economy is underscored by skyrocketing consumer debt, hospitals are under more pressure than ever to track and recover money owed to them.
Statistics regarding uncompensated care suggest that hospitals are deficient in collecting a substantial percentage of co-payments, deductibles and installment payments owed to them. The AHA reported in 2006 that approximately $31 billion worth of care provided by hospitals was uncompensated.
“Half of that amount is charity care and the other half is bad debt,” Maurer said. “Self-pay represents much of that bad debt, which comes mainly from the uninsured and under-insured.”
Chasing this debt can present hospitals with a conundrum in determining which accounts have the ability to pay and which ones are lost causes. This dilemma is especially true for non-profits, which are obliged to provide a certain percentage of charity care. Yet recoupable dollars are out there, Maurer said, pointing out that roughly 40 percent of outstanding debts are from upper income and middle-income brackets.
“Research shows that people see a healthcare bill as less of a priority than others, with reasons being that they didn’t choose to get sick and that hospitals and insurance companies have deep pockets,” Maurer said. “There is too much money on the table to allow that to continue.”
Forthright has taken a new approach to these collections, a way for hospitals to plant the seed of payment assurance up front, before delinquent accounts are handed over to professional collectors. The system integrates a function at the front of the revenue cycle that persuades the patient to permit using an arbitration administrator to resolve any payment disputes.
“This is a patient-friendly way to put some urgency in the healthcare consumer’s mind that the bill is as important as the mortgage or credit card bill,” Maurer said. “Debt collection can be successful without being nasty.”