Healthcare And Kitchen Table Economics
By Tom Furr, CEO, PatientPay
We’re in full-blown presidential campaign season. This race is in stark contrast to prior ones which often featured talks by candidates that visualized a couple or family sitting at the kitchen table discussing where things stood for them economically.
This image has been used as a way to drive the complexities of a growing, global economy to a level all could grasp and appreciate. Whether it was Republican or Democrat, the ones driving for the Oval Office would use that setting as a way to relate to and connect with their fellow Americans.
Economists all across the spectrum of theory will argue the notion of kitchen-table economics is little more than a ploy by office seekers to have voters think they empathize with their plight. Nonetheless, this quadrennial competition, like earlier ones, finds Americans sitting at the kitchen table wondering where their money is going.
Oxford Economics, a global forecasting firm, sees gross domestic product growing 2.6 percent in the current quarter over a year earlier. It notes that U.S. households have increased spending every quarter since the end of 2009.
Interestingly, non-discretionary spending is going toward housing, student debt, transportation, and healthcare. “Those are things that people have little control over but have to come out of somewhere,” said Craig Johnson, president of retail consulting firm Customer Growth Partners. The monetary pie sitting in the middle of the kitchen table isn’t getting bigger; how it gets sliced up is changing markedly.
IHS Global Insight cites healthcare costs now account for about 20 percent of total consumption today, up from a mere 5 percent in 1960. The economics information organization suggests it will rise to 25 percent of consumption by 2025. It’s this reality that prompted Macy’s to close another 100 locations since it saw purchases drop, as did electronics, sporting goods, food and beverage stores as well as restaurant and bars.
As a healthcare provider, the rise in consumer out-of-pocket for medical expenses is a dark cloud with a dark lining. Kalorama Information reports out-of-pocket will be over $600 billion by 2019. You need to do something, now.
Healthcare must embrace the times it’s in and what lies ahead. Maintaining the status quo in terms of how a healthcare business operates is a formula for disaster. Your patients, those folks sitting at the kitchen table shelling out one-fifth to one-quarter of their income to healthcare, need some cooperation, not condemnation, from you. Your rising account receivables means you must help patients deal with the daunting bills they face.
Make no mistake, healthcare is staring at a financial crisis. Solutions to reduce or avert business trauma cannot create more problems in the process. They must be right from the start. They must yield meaningful results quickly. And they must keep your patients as customers; otherwise it really doesn’t matter.
One of my children had a minor cyst removed. The bill was over $3,500 which is equal to a nice trip to the beach for a week. When the bill arrived I reached out to the provider’s office to see if I could set up a payment plan. A staff member told me she’d be happy to set up a plan to help spread out the payments. However, when I offered to provide my credit card number for them to charge each month, the nice lady on the phone said they can’t automatically set up a payment plan. Instead they would have to send me a paper statement each month and I would have to mail back my payment. After having a great experience with the provider and his staff during and after the procedure, my attitude toward this practice turned negative.
Most consumers like me cannot swallow whole a big healthcare bill, so why wouldn’t this group or any other make it easy for me to break it up into digestible pieces? Why not offer payment plans that automatically deduct each month from a credit or debit card? Better still, why not discuss payment plan options before the surgery or as early in the care process as possible? This approach is imperative for continued positive patient engagement.
The logic for this approach can be found in the new reality; healthcare represents a big slice of a household’s economic pie. Paying for it can no longer be a one-time event. Like so many other areas of consumer spending, healthcare reimbursement needs to be about recurring payments.
Moving in this direction will make for a much better patient and provider relationship well after the procedure has been completed. To not do so will bring about even more personal bankruptcies, more animosity towards providers and, in all likelihood, more expensive healthcare.
About The Author
Tom Furr founded Durham, NC-based PatientPay, the patient payment solutions company that offers a patented online billing, collection, and reconciliation services that can be embedded in all current popular management and healthcare information systems, to enhance the productivity and profitability of medical practices, ambulatory networks and hospital systems. His experience in electronic payments and online services for small businesses is reflected in the innovative, easy to use PatientPay solutions.