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Medical Costs: Outpatient Facilities Will Win

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This morning I was on the phone with my wife who had just gone to the local urgent care facility. Her primary care doctor’s office is only useful if you can schedule your health issue a month in advance. If you are lucky enough to get an appointment on the day you request it, you often are met with the worst doctor in the practice who is only available because no one who has ever met him would choose him as their primary physician. The urgent care is not much help either. They can’t treat much and they will inevitably recommend my wife go to the ER to cover their rear ends from a lawsuit, which is what we were trying to avoid in the first place.

The Medical Short Story:

Last summer, two weeks after my wife and I returned from Haiti with our three newly adopted children (yes, I’ve been told we’re crazy already), my wife suffered a pulmonary embolism (wouldn’t you after adopting 3 kids). This began a long, hard road through the most inefficient and expensive application of medicine that exists. That is, the local Emergency Room. A pulmonary embolism is one of those medical issues you don’t want to mess with. Obviously, immediate action was needed.

The problem is that PE can result in inflammation and pain long after the clot has dissolved. The difference between the pain and inflammation that is caused by pleurisy, the after effect of PE, is really difficult to discern from what could be a new PE. For this reason, there have been multiple trips to the ER and many expensive, sometimes duplicate medical procedures, over the last 10 months.  Because hospitals have no idea how to bill, I am just now receiving bills (on a daily and weekly basis) from the first trips we made. I know there is much more financial pain ahead.

My Background

As someone who has worked within the medical industry for nearly 15 years, I know what things cost. I know that hospitals are the most expensive places on the planet. Additionally, I know that the same CT scan completed within the hospital walls gets billed out at $1,600 to $2,000. Although it can be completed with the same quality in an outpatient application for $250-300. It is literally the equivalent of buying hotdogs at a big league ball park instead of at Costco.

This medical knowledge is a problem for me when talking with my wife who has a potentially life-threatening condition. Even though I have friends in the medical community, there is not a clear way to quickly and efficiently access lower cost healthcare. The outpatient axiom of “Cover Your Ass First and Foremost” turns the funnel full blast toward the ER.

This leads me to my premise: outpatient facilities that help customers navigate away from high cost healthcare will win. Actually they could lose, because the system is built to be inefficient. They can, and SHOULD win if three pillars of healthcare come together. That being said, they need some help.

The Three Pillars of Healthcare

1. The Patient

First, is the patient. Patients must learn to advocate for their own medical treatment as well as the cost of their treatment. High-deductible plans, HSAs, and a more focused awareness on actual health care costs in recent years have led to patients being acutely aware of the actual cost of healthcare. This is because it is coming directly out of their pockets.  At this point, most patients understand the problem. Though, have no idea what to do about it. This is where people like my friend Matt Schneider and his company SaveOn Medical are beginning to bridge the gap to empower patients to control their own medical costs.

2. Insurance Companies

Second, is insurance companies. Thankfully, it is in the insurance company’s own self-interest to help control medical costs. That is unless you take a very consistorial view of the system. Insurance companies should focus more on changing the direction of the funnel away from the hospital. They should shift it toward the outpatient setting. As a result, they will either make more money on the delta of money saved. If not, they’ll make the same money while providing a service to their customers for less. Thereby ensuring they have, and keep, more customers.

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3. Outpatient Facilities

Third, there are the outpatient facilities themselves. The outpatient facilities must tell their story directly to their patients. Then they must be responsive to the medical needs of the patients. There are 3 hurdles for the outpatient facilities to overcome: overbooking, the CYA axiom, and sales and marketing savvy (or lack thereof).

    1. Overbooking: Many doctors and facilities have taken the route of United Airlines and have booked beyond capacity. They’re hoping that a few people will not show up, creating space so that the schedule will just “work itself out”.  But as we saw with United, dragging a doctor (coincidentally) off the plane, putting that plan into action doesn’t always produce positive outcomes. In order to take care of patients with immediate medical needs, there must be a margin built. One built into the fabric of the practice. One of the driving reasons for this problem is the continued reductions in reimbursements. If we tell a doctor they will be paid 20% less, it is only natural for them to try to do 20% more to overcome the shortfall. Yes, we need to cut healthcare costs, but it has to be cut where it is most expensive and inefficient, not where it is already lean and mean.
    2. The CYA axiom has to relax a bit: I get it, doctors and facilities have to cover their asses. But, this often results in inaction when action could be taken in the outpatient setting.  The number one reason for this is malpractice lawsuits and insurance premiums are rampant. Three things need to happen to help in this area. First, outpatient facilities and doctors have to do a good job.  While this should go without saying, there are plenty of half-ass medical facilities not living up to their end of the bargain. Second, individuals need to take more responsibility for their own care. They need to understand there are choices and options and all of them have inherent risks. We are at a point in history where we have more information at our fingertips than ever before. Therefore, access it and use it.
    3. Each state needs to institute reasonable caps on malpractice lawsuits and have penalties for unfounded suits. When doctors pay more for malpractice insurance than they spend on staff or rent, we all lose.

As these three pillars converge, outpatient facilities that help customers navigate away from high cost healthcare will win. They need to win, because it is the best way to control healthcare costs on a macro level. Additionally, it will help the healthcare consumer on a micro level. You know, so we can actually save some of our money on things like college for our crazy, hilarious, wouldn’t-want-it-any-other-way 5 kids instead of inflated, insanely expensive CT scans we will find ourselves doing again in 3 months.

At Goalpost Group, we help our clients break the cycle of bad marketing using strategy, structure, and killer content that drives sales and wins the day. Get in touch with a member of our team to learn more about how we can help transform your marketing.

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