In my last blog post, I discussed the three absolutes that every healthcare provider is facing or will soon face: treating more patients, reducing costs, and improving outcomes.
Cutting costs is a huge challenge for healthcare providers. Some healthcare systems have a target as high as $400 million in cost reductions. One key way that providers can reach that goal is by doing everything they can to ensure that patients get the right level of care at the right time—in other words, by encouraging outmigration.
Sometimes the term “outmigration” is used to refer to medical tourism, the phenomenon of patients traveling to seeking medical treatment in another city or state, or even moving to another country in order to address their medical needs. But in this context, I’m using the term to refer to the fact that medical procedures are increasingly being performed in outpatient settings instead of in hospitals, and that the point of care is shifting away from hospitals and toward walk-in clinics, employee healthcare centers, and even self-service healthcare online. Today patients can seek medical care in many different ways.
Increasingly our Cook field representatives are following the trend and going where patients are going: to outpatient surgery centers. Performing a procedure in an outpatient setting cuts costs for many reasons. Hospitals spend a lot on expensive medical equipment, the space to store that equipment, running and maintaining the equipment, the space for hospital beds, specialized clinical staff to handle the most complex procedures, and much more. Outpatient surgery centers can perform many common, minimally invasive medical procedures without incurring all of the costs of running a hospital.
So how do we encourage patients to seek treatment at the right healthcare setting at the right time? In other words, how do we encourage outmigration? We incentivize and educate patients.
In the U.S., the payment model for healthcare is evolving. Historically, under the fee-for-service model, patients weren’t financially incentivized to reduce the cost of their medical treatment. Many insured patients didn’t pay out of pocket for their medical care at all—not even a copay. But today patients may have $2,500, $5,000, or even $10,000 copays. Because patients are becoming responsible for paying some of the cost of their treatment, and because more providers are now using the pay-for-performance model, patients and clinicians are incentivized to not overutilize healthcare services. Of course, we also need to ensure that copays are affordable so that patients can afford to seek medical treatment when they need it.
In addition to making patients responsible for some of the cost of their treatment, another important way that we can incentivize patients to seek the appropriate level of medical care is by making that care easier and more convenient for them to obtain. Walk-in clinics in drug stores and grocery stores represent one way that healthcare is becoming more convenient in the U.S. Nurse-consultation hotlines offer patients a way to get advice about where to seek medical treatment. But these examples are just the beginning. One day patients may even use mobile devices to consult with clinicians remotely.
When providers, payers, governments, and employers educate patients about their choices, patients can make more informed, more affordable decisions. For instance, the U.S. government has an opportunity to make the often complicated and confusing process of obtaining coverage-gap insurance easier and simpler for patients who are enrolled in Medicare. And employers that offer health insurance can create tools that help their employees make more informed decisions about which healthcare provider to choose. Last year Cook provided its employees with a web portal that allows them to comparison shop. A medical test might be $500 at one provider and $1,000 at another provider. If you were a patient who needed that test, which provider would you choose?
Changing the mindset of the patient population will take time. Thankfully, increasingly people are eager to embrace new, convenient, affordable healthcare options. But in order to fully realize the potentially huge cost savings of outmigration, we’ll need to invest a lot of time and effort into educating patients about the importance of seeking medical treatment in the most appropriate setting.
In my next blog post, I’ll discuss the patient experience in more detail. In the meantime, let’s discuss outmigration. What is your organization doing to educate patients? What would you like to do? What are you struggling with? Share your thoughts with me on Twitter and LinkedIn.
David Reed is currently Vice President of Operations, Vice President of Healthcare Business Solutions for Cook Medical Incorporated. With over 30 years of life science industry expertise Dave holds an MBA from California Miramar University and serves as a member of the Indiana University Kelly School of Business Supply Chain and Global Management Academy Advisory Board.