Changes in the healthcare industry, coupled with the evolving consumer mindset, are driving healthcare providers to find new and innovative ways to attract patients. Some ambulatory surgery centers, such as Regional SurgiCenter, have published pricing information online to attract patients who are comparison-shopping.
"In medicine, we've always been afraid to market ourselves," says Arvind Movva, MD, CEO of Regional SurgiCenter in Moline, Ill. "We say that if we are available, behave nicely and provide good services, patients will come to our practice. That changed with elective surgery — such as plastic surgery — where surgeons started marketing their services, but the rest of us remained on the sidelines. That was fine when the margins were high and physicians could cover their costs easily. Now with expenses increasing and reimbursement decreasing, we are reaching the tipping point to where we might not be making money practicing medicine. That's what made people say we should look into this."
Here, Dr. Movva discusses his decision to publish pricing information online and where the trend of healthcare consumer marketing is headed in the future.
Q: Why did you set up your program to publish pricing information on the website?
Dr. Arvind Movva: We all know that value is dependent on two factors, quality and cost. Initially, we realized that our website talked about quality and not about cost so we wanted to address that. It's something surgeons are not comfortable talking about with their patients, but we wanted to let consumers know that it would cost them twice as much to have their procedure done at a hospital.
There is fear in the physician community that hospitals will be upset and there might be repercussions, because they might steer primary care networks away from us, but what we are talking about here is high quality, low cost care, which is what payors, including the government have asked us to provide. For decades ASCs have provided this value, but the consumer is often unaware of this, even if they perceive higher quality, most do not know the cost savings, and some I have talked to even thought an ASC would be more expensive, since it is a superior experience.
I tell my patients that I'm the same physician and if we do the procedure at the ASC you will get charged one price and at the hospital you'll be charged more. I also tell them about the quality comparison. The endoscopes we use at the hospital are older; at the surgery center we have the latest scopes with high definition optics and improved features such as narrow band imaging. Here we get the pathology reports back within 24 hours, and at the hospital it often takes seven to 10 days. That wait can really be difficult, because we are not able to treat our patients quickly and they have anxiety about the results, especially in cases were cancer is a possibility.
In our surgery center, we use MAC sedation, which is better than using conscious sedation at the hospital. Wait times are also shorter here. Sometimes patients are only here for an hour and 15 minutes total whereas they might spend that long at the hospital just waiting to get into the procedure. Hospitals are not designed to process these types of high volume outpatient procedures — they are designed for acute care, which they do well. As a nation, we need to triage care to the most effective facilities to maximize value and ASCs are well designed to provide high value for outpatient procedures.
Q: How prevalent is it for surgery centers to post their prices online? Is that idea gaining traction in the market?
AM: Practices from around the country have been looking into it. Hospitals have billboards about coordinating care and finally now physician practices and ASCs are getting into the marketing business as well. In a consumer-driven healthcare market, it has become necessary.
Traditionally, Medicare paid the usual and customary fee; the provider submitted their bill, and as long as it was similar to others in the area it was fine. Then, we moved into the CPT world. In the future, we are looking at bundled payments, capitation, and ACOs. Now we need to move into a new role where we are talking about value as the key driver. Value is quality divided by cost. Much of the time, we talk about quality and don't address the cost aspect of care.
We are in the limbo stage with our website where we don't want to be aggressively out there because we aren't sure how well that would be received, but as time goes on and margins shrink even more, this is what everyone will be doing. I think it's a matter of time before there is a billboard outside of every hospital or HOPD (hospital outpatient department) saying, "You Could Get This Done for Half the Price Down the Road."
Q: Has posting pricing information on the website attracted patients?
AM: We've had patients notice it and tell their friends. If you are talking about people with fixed income, they don't have a choice but to comparison shop. Between their medication costs and fixed cost of living, finding the low cost provider is very important. We've had patients who underwent procedures somewhere else bring in their bills to ask why it was so much more expensive and couldn't believe there was such a difference in price, especially since they had the same or most times a better experience at the surgery center.
Every practice has a few patients who leave or decide to doctor shop; when they pick up their records from us, we have a print out of our cost information on the top of their records so they can easily make the comparison.
Q: What is driving the trend toward publishing pricing information online and focusing cost in addition to quality?
AM: In addition to payor and regulator incentives to provide the highest quality possible for the lowest cost, there is a generational change in how consumers consume everything. This is driving a change in how people choose their doctors and in what setting they consume medical care. In the future there will be data that shows cost comparisons for each doctor online and currently patients can post on websites like Yelp or other social media what they paid and whether they had a good experience. The days of costs and quality data being under a shroud are over and we have to prove to patients we will provide high quality, low cost care. In this battle ASCs win every time.
The generations under 40 shop for everything online, from books to plane tickets; why pay more for an airline when there is very little difference? They want to make advised decisions for themselves. We are really getting into the era where patients are going to pick their doctors on a lot more than just their primary care physician's suggestion. They are going to be involved in their own advocacy and primary care physicians will be questioned by their patients on why they are recommending a certain provider, whether that be a physician or facility.
That's what everyone is trying to do in healthcare: alter behavior. The alignment of both provider and consumer incentives is the goal of all changes in healthcare. HMOs didn't align incentives properly because if you didn't do anything, you ended up with the most benefit as providers. In this new era, the consumer is going to be the one who influences all of this. High deductible plans are being used to incentivize the patient to find the highest quality and lowest cost provider.
Q: How do consumers interact with this information about cost and quality at the surgery center versus the hospital?
AM: Traditionally, most people didn't see the direct cost of their healthcare, so nobody knew what it cost for anything. In other industries we would try to see what someone would pay at our facility versus the another, but due to regulations in healthcare we can't compare because we can't look at the hospital's insurance contract, but studies show that there are 54 percent lower payments across the board for ASCs when compared to hospitals or HOPDs.
As a consumer, I have to consider whether the procedure would be best at Regional SurgiCenter or the local hospital. It's like if I go to a restaurant, I can see what the price is for a cheeseburger and if it's more expensive than the place around the corner, but not a better burger, I wouldn't eat there. We are trying to empower our patients to see these facts. Insurance companies are now showing enrollees what their copay is with different providers, and using this to drive their enrollees to the lower cost settings.
We use Medicare data at our practice because it's available to everyone. When you are using Medicare data, we can show patients how much their out-of-pocket expenses are, which helps patients make an informed decision as a consumer.
Q: If patients and providers do begin bringing more patients to ASCs, how will that impact healthcare delivery?
AM: If we took just 50 percent of outpatient procedures done in hospitals that have ASC eligible codes and moved these cases into the ASC setting, CMS would save $2.1 billion instantly last year. In our region, we are having discussions about accountable care organizations. If we are able to take more procedures to the ASC, it will immediately save the ACO money and everyone will share in the savings. This doesn't take any extra work because we already have the facilities and infrastructure available.
Employers want to look for a cost savings too. Whoever is paying the bill will realize an immediate savings. As an employer, our health insurer for our staff continues to raise rates by double digit percentage increases year over year; at the same time they are cutting our reimbursement, which is very frustrating as mid-sized business. If I'm a large employer, I would encourage employees to get care in a low cost setting so when I have the negotiations, I can say to our insurer: we have managed to drive down the cost of care and should be rewarded with a slower rate of increase, if not a decrease in the cost of our insurance.
Q: Have you experienced cooperation from the hospital for taking more cases into the surgery center? How do you think they will react with as more cases transition into that setting in the future?
AM: I think hospitals see this as something that will have to be done, but they don't want the transition to happen until they have more control over ASCs. That's why they are getting into the market—because they need to lower their costs. I think that's going to fail because they are taking a hospital mentality into ASCs; some will succeed, but I much prefer ASCs be independent or with some hospital partnership if the local market dictates this.
More physicians are going to become involved in surgery centers as a result of ACOs. If it's going to be their skin in the game, why not move cases to the ASC and share in those savings? This is going to happen and since the ASC industry has already established itself as the low-cost, high-value provider of outpatient care, I think we can do it better than hospitals.
More Articles on Surgery Centers:
8 Steps to Cut Cost Per Case in Surgery Centers
15 Surgery Centers With Physical Therapy Programs
5 Crucial Points on Moving Out-of-Network as an ASC
"In medicine, we've always been afraid to market ourselves," says Arvind Movva, MD, CEO of Regional SurgiCenter in Moline, Ill. "We say that if we are available, behave nicely and provide good services, patients will come to our practice. That changed with elective surgery — such as plastic surgery — where surgeons started marketing their services, but the rest of us remained on the sidelines. That was fine when the margins were high and physicians could cover their costs easily. Now with expenses increasing and reimbursement decreasing, we are reaching the tipping point to where we might not be making money practicing medicine. That's what made people say we should look into this."Here, Dr. Movva discusses his decision to publish pricing information online and where the trend of healthcare consumer marketing is headed in the future.
Q: Why did you set up your program to publish pricing information on the website?
Dr. Arvind Movva: We all know that value is dependent on two factors, quality and cost. Initially, we realized that our website talked about quality and not about cost so we wanted to address that. It's something surgeons are not comfortable talking about with their patients, but we wanted to let consumers know that it would cost them twice as much to have their procedure done at a hospital.
There is fear in the physician community that hospitals will be upset and there might be repercussions, because they might steer primary care networks away from us, but what we are talking about here is high quality, low cost care, which is what payors, including the government have asked us to provide. For decades ASCs have provided this value, but the consumer is often unaware of this, even if they perceive higher quality, most do not know the cost savings, and some I have talked to even thought an ASC would be more expensive, since it is a superior experience.
I tell my patients that I'm the same physician and if we do the procedure at the ASC you will get charged one price and at the hospital you'll be charged more. I also tell them about the quality comparison. The endoscopes we use at the hospital are older; at the surgery center we have the latest scopes with high definition optics and improved features such as narrow band imaging. Here we get the pathology reports back within 24 hours, and at the hospital it often takes seven to 10 days. That wait can really be difficult, because we are not able to treat our patients quickly and they have anxiety about the results, especially in cases were cancer is a possibility.
In our surgery center, we use MAC sedation, which is better than using conscious sedation at the hospital. Wait times are also shorter here. Sometimes patients are only here for an hour and 15 minutes total whereas they might spend that long at the hospital just waiting to get into the procedure. Hospitals are not designed to process these types of high volume outpatient procedures — they are designed for acute care, which they do well. As a nation, we need to triage care to the most effective facilities to maximize value and ASCs are well designed to provide high value for outpatient procedures.
Q: How prevalent is it for surgery centers to post their prices online? Is that idea gaining traction in the market?
AM: Practices from around the country have been looking into it. Hospitals have billboards about coordinating care and finally now physician practices and ASCs are getting into the marketing business as well. In a consumer-driven healthcare market, it has become necessary.
Traditionally, Medicare paid the usual and customary fee; the provider submitted their bill, and as long as it was similar to others in the area it was fine. Then, we moved into the CPT world. In the future, we are looking at bundled payments, capitation, and ACOs. Now we need to move into a new role where we are talking about value as the key driver. Value is quality divided by cost. Much of the time, we talk about quality and don't address the cost aspect of care.
We are in the limbo stage with our website where we don't want to be aggressively out there because we aren't sure how well that would be received, but as time goes on and margins shrink even more, this is what everyone will be doing. I think it's a matter of time before there is a billboard outside of every hospital or HOPD (hospital outpatient department) saying, "You Could Get This Done for Half the Price Down the Road."
Q: Has posting pricing information on the website attracted patients?
AM: We've had patients notice it and tell their friends. If you are talking about people with fixed income, they don't have a choice but to comparison shop. Between their medication costs and fixed cost of living, finding the low cost provider is very important. We've had patients who underwent procedures somewhere else bring in their bills to ask why it was so much more expensive and couldn't believe there was such a difference in price, especially since they had the same or most times a better experience at the surgery center.
Every practice has a few patients who leave or decide to doctor shop; when they pick up their records from us, we have a print out of our cost information on the top of their records so they can easily make the comparison.
Q: What is driving the trend toward publishing pricing information online and focusing cost in addition to quality?
AM: In addition to payor and regulator incentives to provide the highest quality possible for the lowest cost, there is a generational change in how consumers consume everything. This is driving a change in how people choose their doctors and in what setting they consume medical care. In the future there will be data that shows cost comparisons for each doctor online and currently patients can post on websites like Yelp or other social media what they paid and whether they had a good experience. The days of costs and quality data being under a shroud are over and we have to prove to patients we will provide high quality, low cost care. In this battle ASCs win every time.
The generations under 40 shop for everything online, from books to plane tickets; why pay more for an airline when there is very little difference? They want to make advised decisions for themselves. We are really getting into the era where patients are going to pick their doctors on a lot more than just their primary care physician's suggestion. They are going to be involved in their own advocacy and primary care physicians will be questioned by their patients on why they are recommending a certain provider, whether that be a physician or facility.
That's what everyone is trying to do in healthcare: alter behavior. The alignment of both provider and consumer incentives is the goal of all changes in healthcare. HMOs didn't align incentives properly because if you didn't do anything, you ended up with the most benefit as providers. In this new era, the consumer is going to be the one who influences all of this. High deductible plans are being used to incentivize the patient to find the highest quality and lowest cost provider.
Q: How do consumers interact with this information about cost and quality at the surgery center versus the hospital?
AM: Traditionally, most people didn't see the direct cost of their healthcare, so nobody knew what it cost for anything. In other industries we would try to see what someone would pay at our facility versus the another, but due to regulations in healthcare we can't compare because we can't look at the hospital's insurance contract, but studies show that there are 54 percent lower payments across the board for ASCs when compared to hospitals or HOPDs.
As a consumer, I have to consider whether the procedure would be best at Regional SurgiCenter or the local hospital. It's like if I go to a restaurant, I can see what the price is for a cheeseburger and if it's more expensive than the place around the corner, but not a better burger, I wouldn't eat there. We are trying to empower our patients to see these facts. Insurance companies are now showing enrollees what their copay is with different providers, and using this to drive their enrollees to the lower cost settings.
We use Medicare data at our practice because it's available to everyone. When you are using Medicare data, we can show patients how much their out-of-pocket expenses are, which helps patients make an informed decision as a consumer.
Q: If patients and providers do begin bringing more patients to ASCs, how will that impact healthcare delivery?
AM: If we took just 50 percent of outpatient procedures done in hospitals that have ASC eligible codes and moved these cases into the ASC setting, CMS would save $2.1 billion instantly last year. In our region, we are having discussions about accountable care organizations. If we are able to take more procedures to the ASC, it will immediately save the ACO money and everyone will share in the savings. This doesn't take any extra work because we already have the facilities and infrastructure available.
Employers want to look for a cost savings too. Whoever is paying the bill will realize an immediate savings. As an employer, our health insurer for our staff continues to raise rates by double digit percentage increases year over year; at the same time they are cutting our reimbursement, which is very frustrating as mid-sized business. If I'm a large employer, I would encourage employees to get care in a low cost setting so when I have the negotiations, I can say to our insurer: we have managed to drive down the cost of care and should be rewarded with a slower rate of increase, if not a decrease in the cost of our insurance.
Q: Have you experienced cooperation from the hospital for taking more cases into the surgery center? How do you think they will react with as more cases transition into that setting in the future?
AM: I think hospitals see this as something that will have to be done, but they don't want the transition to happen until they have more control over ASCs. That's why they are getting into the market—because they need to lower their costs. I think that's going to fail because they are taking a hospital mentality into ASCs; some will succeed, but I much prefer ASCs be independent or with some hospital partnership if the local market dictates this.
More physicians are going to become involved in surgery centers as a result of ACOs. If it's going to be their skin in the game, why not move cases to the ASC and share in those savings? This is going to happen and since the ASC industry has already established itself as the low-cost, high-value provider of outpatient care, I think we can do it better than hospitals.
More Articles on Surgery Centers:
8 Steps to Cut Cost Per Case in Surgery Centers
15 Surgery Centers With Physical Therapy Programs
5 Crucial Points on Moving Out-of-Network as an ASC