Analysts at Moody’s Investors Service weighed in on the larger role consumer choice will play in determining where some healthcare services are delivered. According to its new Sector In-Depth report, hospitals that provide convenient, high-quality care and customer service will “gain patient loyalty, improve market share and boost credit strength.”
The report details four key factors:
Physical and virtual convenience. There has been a significant shift in care delivery sites to outpatient settings. Median outpatient revenue has increased from 46.4 percent of net patient revenue in 2011 to 49.2 percent in 2014. Many hospitals are building or leasing outpatient space in geographically diverse settings to improve convenience. They also are investing in new technologies to facilitate physician-to-patient communication such as telemedicine, virtual clinical appointments, patient websites, smartphone and mobile device applications.
Investments in strategies to measure and improve customer experience. Moody’s characterizes not-for-profit hospitals as operating in a competitive, service based-industry where providers must devote greater resources to better customer service and experience. Under health reform, measures of clinical quality and patient satisfaction will have a growing financial impact on hospitals and will affect payer reimbursement rates.
Escalating demand for healthcare value and price transparency. Consumers are paying higher deductibles, whether they get their insurance through their employers or a health exchange. They have developed a price sensitivity not seen even five years ago. Hospitals that demonstrate value and provide transparent, understandable pricing on treatment costs may gain market share among price-sensitive patients.
Less comparison shopping for more complex and non-routine healthcare needs. Consumer choice will be more significant for simpler, lower-acuity services. Physician and hospital reputation will continue to be the primary factors influencing volumes for higher-acuity, higher-reimbursed services.
(Source: The Patient as Consumer: Convenience and Value Drive Hospital Strategies, Moody’s Investors Service, June 11, 2015)
iProtean subscribers, you can read the full report from Moody’s in the Resources section of the upcoming course, Consumerism: Strategic and Financial Implications, Part Two.
Consumerism: Strategic and Financial Implications, Part One is in your library now. In this course, Mark Grube (Kaufman Hall), Marian Jennings (M. Jennings Consulting) and Nathan Kaufman (Kaufman Strategic Advisors) discuss the move to consumerism in health care and some of its effects.
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