Consumers Need to Be Educated About the Financial Side of Healthcare

This post excerpts an interview in the Q2 2016 Provider Advisor with Joe Fifer, President and CEO of the Healthcare Financial Management Association (HFMA).

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As early as 2006, HFMA, together with the American Hospital Association and the Medical Group Management Association, published Consumerism in Health Care, a report with a simple message: embrace consumerism. In 2007, HFMA released the study, Reconstructing Hospital Pricing Systems: A Call to Action for Hospital Financial Leaders. As HFMA President and CEO Joseph J. Fifer, FHFMA, CPA, observed, those documents are even more relevant today than they were when first published.

“You might think of those early publications as being prophetic and ahead of their time, but the things we were talking about in 2006 and 2007 have come to pass in 2016. In that way, HFMA was ahead of its time in highlighting the importance of patient education and price transparency.” Indeed, what may have been a lone voice highlighting the need for consumer-centered financial information in the first decade of the new century has now been joined by a booming chorus in 2016.

Politics vs. Policy

The new reality of healthcare economics is still unfolding; its ultimate direction is not fully known. There is, however, one factor that is knowable—there is no going back. The patient as consumer has begun to participate in reshaping the healthcare marketplace. There will be a new way of paying for healthcare that is different from what we have known. All stakeholders will have to make adjustments, including providers of healthcare services.

“From time to time, I still talk with a CFO who insists that healthcare payment reform will blow over, that this is all just a ‘flavor of the month’ phenomenon—perhaps, a media-created event. Part of my role, and the role of HFMA, is to provide the realistic viewpoint that we are in a new world now and that here is no going back. It is up to us to understand the new reality and take a leadership role in making the necessary changes.” According to Fifer, the role of HFMA is to take the lead in seeing the landscape ahead as clearly as possible, encouraging and equipping key stakeholders to make strides in vital areas, including price transparency, patient education, and patient experience.

Price transparency should enable patients to make price comparisons before receiving care. As pointed out in the HFMA publication, Price Transparency in Health Care: Report from the HFMA Price Transparency Task Force, the information should be easy to use, communicate clearly, and be paired with quality and other relevant information that defines the value of services. It should ultimately provide patients with the information they need to understand the total price of their care and what is included in that price. Ideally, price transparency information for insured patients should include a total estimated price, a clear indication of whether a provider is in-network, a clear statement of the patient’s estimated out-of-pocket responsibility, and any other relevant, provider- or service-specific information, such as clinical outcomes, patient safety, or patient satisfaction scores.

Focus on Patient Education

Patient education is a priority with HFMA. Addressing topics such as cost-sharing, insurance provisions, and the financial impact of out-of-network care encourages people to make better healthcare choices in a consumer-driven marketplace. The HFMA publication, Understanding Healthcare Prices: A Consumer Guide ( consumerguide/), is built on the premise that educated consumers are empowered to make better healthcare choices. As stated in that guide for consumers, “Although this guide focuses on prices, learning about the quality of your healthcare is critical as well. Price does not necessarily relate to the quality of care. “

More expensive does not mean better care!” Patient experience involves much more than the patient’s evaluation of the direct provision of clinical care. The federally-mandated patient experience survey is a limited tool that can only address a finite number of factors. There is only so much time that patients are willing to commit to that exercise. For this and other reasons, patient experience surveys often only address patients’ perceptions of how well they felt they were treated by their direct care provider. All too often the definition of the patient experience has focused primarily on the clinical aspects of care and, to some extent, the environment in which that care took place. However, the patient experience reaches well beyond the clinical aspects. Traditionally, the last contact the patient has with the hospital is associated with finances. Those “back-end” interactions are definitely part of the patient experience! They may be the interactions that stay with the patient and influence their assessment of their total experience—favorably or otherwise.

Establish a Strategy and Approach for Patient Financial Communicaiton

A consistent, clear approach to financial communication with patients is fundamental to creating a good financial experience for patients. HFMA’s Patient Financial Communications Best Practices® ( aspx?id=20098) provides those fundamentals. “As an industry, we need to pick up the pace,” said Fifer. “We need to do a better job of understanding patient needs and expectations related to their finances.” Fifer acknowledges the crucial role played by legislators and policy-makers in shaping the future of healthcare payment systems.

Fifer does not see the role of HFMA as an advocate for (or opponent of) any particular political position or piece of legislation; but, he is passionate about the industry having meaningful input into the way legislation and implementation rules are crafted. “Who knows better how our industry functions better than those of us who work in it every day?” said Fifer. “Yes, as an industry we have an obligation to make the changes needed to be more patient-friendly and consumer-focused. We will do that. It is also crucial that we have significant input into how legislation is developed when it affects our industry directly.”

April 1, 2021