Our mission is to deliver the best insights to help you grow and prosper in our rapidly-changing world of healthcare. To that end, from time to time, we have decided to showcase what we consider to be some of the best and the brightest minds in the industry here in the Catalyst Healthcare Research blog.

Today, it is my pleasure to welcome as a guest to “For the Record” Christopher Parks, Founder and Chief Executive Officer of change:healthcare, a technology company that makes consumer directed healthcare (CDHC) work for employers and their employees.

Of all the issues in the American healthcare system today that I find terribly frustrating is the lack of cost transparency. 

There is a much-needed desire today among healthcare providers, the government, consumers, employers and insurers to reign in the cost of healthcare.  This change is critical to building better healthcare and I contend the move will need to be led by an informed buyer.  Up to this point, however, buyers have been denied access to the information needed to make informed decisions about care and cost.  And if they magically had the information, would they know what to do with it, since “shopping” for care is not a refined skill they possess. 

But to make our healthcare system a better one, the first step is overcoming cost transparency. 

The lack of transparency is one of the reasons why I founded change:healthcare, with the mission to reduce healthcare costs for employers and employees.  While working through bills associated with my late parents’ estate a few years ago, I could barely decipher which physicians, hospitals and other professionals were owed what, by whom and how much.  The paperwork was overwhelming.  Here I was a 17-year veteran of the healthcare industry and I couldn’t make sense of it all.  If I couldn’t figure out all these bills and costs, how could other patients who have no professional understanding of the system?

As consumers, we know the cost of most every item we purchase before we ever buy it.  But if you need a simple hernia repair, one of the most common procedures performed by surgeons, no one can tell you what it is probably going to cost.  Why is that the case?  It doesn’t have to be. 

Sure, the price of most sick care is pre-negotiated between providers and insurance companies.  And that price can differ from patient to patient, insurer to insurer.  Medical complications can also sometimes increase the cost of a procedure.  But getting a handle on what a procedure or product or prescription should cost is a lesson in total frustration because there is no cost transparency.  How can you make smart, informed decisions about your and your family’s healthcare with so little knowledge?

I believe consumers today are paying way too much for their healthcare simply because they don’t know they could pay less somewhere else.  And, right now, the system is shrouding the very information that would help.  As today’s health insurance becomes even more expensive, more and more people are going to be asked to spend greater amounts out of their own pockets on sick care.  And consumers in greater numbers will begin demanding transparency; a move we believe will help everyone. 

Recent research from the Society of Actuaries have validated our belief that transparency would be a boon to helping patients and consumers make better healthcare purchase decisions and lower healthcare costs in general.  A study of actuaries and a companion study of consumers affirm that more transparency in the healthcare system is critical to lowering costs.  For instance, 86 percent of surveyed healthcare actuaries recommended making prices for treatments more visible and available for patients while two-thirds of consumers felt they could better control their own healthcare costs if healthcare providers, or their insurance company, told them about costs.

Other studies have validated that encouraging more individual responsibility in a person’s healthcare choices results in better medical outcomes and lower prices.  Price sensitivity and having the information in your hands to make rational decisions is the fuel that drives personal involvement in healthcare.

That’s what change:healthcare has tried to do since our 2006 launch.  Our solution has been a web-based tool that helps guide employers, employees and third party administrators in making more informed healthcare consumer purchase decisions that save money.  All without plan design changes or cost shifting.   We help employers and their workers choose the most affordable providers for medical services, treatments and prescriptions by analyzing a company’s medical claims – precisely what people are spending – and continually sending cost-savings alerts to employees when savings opportunities are found. 

It’s been an effective strategy.  Although right now the key question is what effect recent health reforms might have on CDHC’s, cost transparency and our need to move the system toward greater consumerism? 

That aside, the lessons we’ve learned about transparency and healthcare are really quite simple.  When you incentivize people to make value-driven healthcare choices and provide unfettered access to information about those choices, invariably consumers make far more insightful decisions about their care, its cost and its quality.  It’s simple common sense.  I have no doubt that with greater transparency placing more information and control into consumer hands, Americans could realize millions in healthcare cost savings. 

Christopher Parks is Founder and Chief Executive Officer of change:healthcare, inc. (www.changehealthcare.com), a technology company that makes consumer directed healthcare (CDHC) work for employers and their employees.  The company’s real dollar ROI-tracking solution, which offers over 750 highly personalized ways for employees to save on prescriptions and medical services, is available through third party administrators, self-insured employers and health plans interested in helping employees and members better manage their out-of-pocket healthcare expenses. 

Forty-three years ago, in 1967, a Scottish fellow named John Shepherd-Barron invented the ATM (Automatic Teller Machine, in case you have forgotten what this ubiquitous acronym actually stands for). He thought about vending machines and asked himself the question: “If a machine can dispense chocolate, why can’t it give me cash?” Apparently, the idea of an ATM caught on. Today, there are over 1,700,000 ATMs worldwide!

The first high-deductible healthplan tied to a Health Savings Account, or HSA, was introduced in January, 2004. Like the ATM, initial acceptance was slow. Only the early adopters types understood the concept, appreciated the idea, and were willing to sign on.

But roll the clock forward a few short years.

As reported just this month by AHIP, the use of Health Savings Accounts has grown to the point where ten million Americans now have a HSA-type healthplan! From zero to ten million in just over seven years – that’s rapid adoption!

It looks like in both the case of the ATM and the HSA that the product is fulfilling an important need. In the case of the ATM, it’s convenience. With HSAs, it’s a way to try and hold down healthcare costs while giving the consumer (you and me) greater control over our spending. It shows how the health insurance landscape can shift rather dramatically in a relatively short period.

HSAs offer the hope that if we, as consumers, have some “skin in the game” in terms of paying the direct costs for (some of) our healthcare, that we will make better decisions.

Just as a change in personal habits caused by ATMs foretold (and helped cause) a shift to doing banking anytime and virtually anywhere (think online banking via mobile phones), so too is the HSA part of a bigger picture.

HSAs have already sparked an interest by consumers in being able to evaluate cost and quality information about doctors, imaging centers, and hospitals. This is a seismic shift, and we’ve only felt the first tremors.

Healthcare in this country is changing rapidly, provoked by a number of drivers and events. And while significant changes in the healthcare landscape can take decades (the time it takes to train a new generations of doctors, for example), the story of ATMs and HSAs shows us it can also happen in just a few years.

Click here for more information about the penetration of HSAs.

Our mission is to deliver the best insights to help you grow and prosper in our rapidly-changing world of healthcare. To that end, from time to time, we have decided to showcase what we consider to be some of the best and the brightest minds in the industry here in the Catalyst blog.

Today, it is my pleasure to welcome Daniel Fell, Executive Vice President of ND & P, a full-service healthcare marketing advertising agency based in Richmond, VA as our guest to “For the Record.”

When it comes to healthcare, few issues strike as much fear and hand wringing among executives and clinicians as the topic of quality ratings. Thrust into defending our low scores and wavering on the benefits of advertising our top ones, marketers and executives alike struggle with the relative importance of transparency and how best to manage communicating quality measures to our varied stakeholder audiences. And to top it off, for many of us, it feels as though every week brings some new third-party review, quality ranking or healthcare assessment program.

While marketers have not traditionally been as involved in the quality side of the healthcare business – either from a clinical or a customer service perspective – increasingly, our talent and leadership is being sought by organizations focused on staying ahead of the ever-evolving hyper-quality environment. Competing in the current healthcare environment often means differentiating on quality measures. But the issues go far beyond simply promoting a national award or communicating a select number of outcomes measures in an annual report. Marketers today are faced with a myriad of challenges from understanding mortality statistics and changes in government reporting requirements to strategizing on pricing for retail services and pay-for-performance programs. In short, the issue of quality is a much bigger and more significant part of the healthcare marketing agenda than ever before and will likely only grow.

The real challenge for many healthcare organizations has been moving the discussion from the tactical (“how do we show we’re number one in something” as one exasperated physician blurted out in a marketing advisory meeting for a regional provider system) to the truly strategic. Part of this lies in the fact that quality within healthcare systems has not been terribly transparent in the past and in the fact that the issue cuts across the entire organization. Further complicating matters, ownership for measuring, improving and communicating quality has never been clearly attached to one department or area of the organization. In fact, it’s only been in the past few years that something akin to a chief quality officer has even existed within many hospitals. And even then, it’s difficult for any one person to successfully oversee the clinical, service, operational and financial aspects of quality within a typical health system.

One method that is proving effective involves creating a multi-disciplinary quality team tasked with looking at all aspects of the organization’s quality efforts. By bringing together representatives from across the system and including the most diverse areas of expertise and focus, healthcare institutions are finding that they take a more disciplined and strategic approach to incorporating quality into their marketing efforts.

In an effort to help facilitate this type of approach, we developed a free tool that we refer to as the Strategic Quality Measures Readiness Assessment. The tool is meant to serve as a self-assessment checklist and strategy guide for executive and marketing teams and a foundation for management team communications and planning efforts around healthcare quality measures and transparency. It consists of three key components: 1) internal initiatives, 2) local/regional initiatives and 3) state and national initiatives and a simple rating system based on an organization having the measures in place, working on them or needing to address. After totaling the scores, organizations can review the areas where they need or want to focus resources and use the assessment tool as a general guide for developing a quality marketing and communications plan.

While the Strategic Quality Measures Readiness Assessment is only one approach to measuring quality readiness and should be used in conjunction with other planning resources to develop the best strategy for your organization, it can be a useful tool for marketers and quality teams to jump-start their planning initiatives and stay ahead of the ever-changing quality environment today. Often, additional research with consumers, patients and referral sources helps fill in the gaps identified in the assessment process and allows the organization to create better benchmarks to evaluate progress.

Successfully competing on quality goes far beyond the marketing function, but marketers can and should play a more pivotal role in guiding the organization’s approach to delivering high quality and differentiating programs and services.

***

Daniel Fell is a marketing consultant and executive vice president with Neathawk Dubuque & Packett, a full-service healthcare marketing and advertising agency based in Richmond, Virginia. He recently presented on the topic of marketing on quality at the American College of Healthcare Executive’s 2010 Congress on Healthcare Leadership. He can be reached at dfell@ndp-agency.com or www.twitter.com/danfell.

I’m convinced that to truly improve the customer experience, you must go far beyond measuring satisfaction and loyalty. Experiences are created by multiple touchpoints across the whole continuum of care… from the first encounter with your brand through the last. Advertising, website, employees, doctors, nurses, physical environment, follow up, billing – all have an impact on the total experience. Until we get serious about each and every one of these touchpoints, the customer experience will suffer.

Healthcare leaders appear to be finally waking up to this reality. I was encouraged to read some of the comments from hospital executives who attended the HealthLeaders Media 2009 Marketing Experience conference in Chicago. They were challenged to think about how they could create ambassadors for their brands. Here are a few of the comments shared in a post by HealthLeaders Marketing blogger Gienna Shaw:

• Provide exceptional service—that is the best marketing.
• Ask your patients and staff—they will tell you.
• Ask patients at discharge, “What could we have done better?”
• Understand their needs and exceed them.
• Market in a way that differentiates you from competitors.
• Anticipate their questions and be consistent with answers.
• Don’t ask patients how they feel when they are laying on a gurney.
• Do something meaningful, memorable, and unexpected.
• Find something that patients generally identify with and follow that theme.
• Put the patient first.
• Personalize patient experiences every time.
• Give team members “permission” to customize the experience.

Now let’s turn those ideas into ACTION! But how?

Measuring satisfaction is good, but measuring your customer’s experience is better. Satisfaction research alone is no guarantee that there aren’t cracks in the customer experience, and where there are cracks, there are opportunities for customers to become dissatisfied.

I believe effective customer experience research includes the following components:

1. Must actually talk (have a dialogue) with customers NOT simply survey them online or with paper
and pencil.
2. Must capture customer thoughts/feelings as close to the point of intersection with the brand as
possible. May include action research or ethnography.
3. Must be measured over time and link actual behaviors with attitudes about the brand
experience.
4. Must engage the customer in the conversation that they want to have NOT in the conversation
you want them to have.
5. Must have a mechanism for capturing strong customer stories that can be shared with
others.
6. Must place more emphasis on finding the emotional connection with the brand and the emotional
drivers of brand decisions than on the functional benefits.
7. Must include periodic reporting of the individual customer experience. Taking your customers’
brand temperature over time enables you to make immediate changes that can give the brand
positive lift.

Measuring customer experiences over time can help you improve marketing and operations, develop new products and services, and create ambassadors for your brand at the same time. Can your satisfaction surveys deliver that sort of return on investment?

Are senior health executives really committed to creating better customer experiences, or are they just saying what we all want to hear?

I just read a recent HealthLeaders Media study that says patient experience is among the top five priorities of senior health executives.

Given my latest experience with our current healthcare delivery model, I hope they get started soon!

My wife needed outpatient surgery on her hip. On the appointed day, we dutifully showed up at the local hospital at the unseemly hour of 5 a.m. for her scheduled 7 a.m. surgery. Following registration, we were taken to a private room, and she changed into one of those flimsy gowns that hospitals are famous for…except this one had holes in it. (what does that say about respect for a patient?)

And then we waited. And waited. And waited some more. Finally, after numerous inquiries, we learned that our surgeon had switched the order of surgeries for the day. Finally, at 2 p.m. she was taken down for her one-hour surgery. Wouldn’t a little communication have been helpful?

We finally left the hospital after 7 p.m. that night, tired and with a less than positive impression of the hospital and the doctor.

Apparently, I’m not alone. Discontent with the current healthcare system is growing. A new study from Deloitte indicates that healthcare consumers want to be more engaged and gain greater control over their healthcare decisions. The Deloitte study finds:

• Nearly 40% of consumers rate the U.S. healthcare system a D or F
• A quarter of consumers have skipped care when they were sick or injured; two in five of them did so
because they simply could not afford it, were not covered by insurance or thought the costs were
too high
• Three in 10 switched medications in the past year; 38% switched to save money
• 53% of consumers would like employers to be required to provide health insurance for employees
• 37% favor a mandate requiring every American to obtain health insurance either through direct
purchase of through an employer or government program
• Seven in 10 say they would participate in a wellness program if they were given financial incentives,
such as reduced insurance premium or monetary reward
• 13% of consumers have visited a retail clinic this year and 30% said they would do so if it cost 50%
less than seeing a doctor in a doctor’s office
• 42% want access to an online personal health record connected to their doctor’s office
• 65% of consumers are interested in home monitoring devices that enable them to check their
condition and send the results to their doctor

Sounds like consumers know what they want, and many of them are demanding to be heard. So if you’re a healthcare provider or a health plan, you should probably be asking – do I know what my patients and/or customers want? Am I engaging them in a way that makes them want to tell others? Or are they unhappy and ready to tell anyone who will listen?

Consider these websites…all devoted to giving disgruntled customers a voice:

Physicianreports.com

RipoffReport.com

Complaints.com

PissedConsumer.com

What are your customers saying about you?