Employer outreach: The key to improving payer mix


Imagine going to an electronics store where 33% of the customers pay the full price of $600 for a laptop computer while a select 40% pay just $480 – and a lucky 16% pay just $336 for the identical product. How would the retailer survive when more than half of the customers are getting such steep discounts?

Unfortunately, that’s the situation facing many healthcare providers. According to a recent Forbes report, Medicare reimburses providers just 80% of what private insurance pays, while Medicaid only pays about 56% for the same procedures and consultations.

Both Medicare and Medicaid reimbursements continue to trend downward, particularly for specialty practices. The Centers for Medicare and Medicaid (CMS) is now lowering reimbursement rates for many specialists in order to pay for the new Transitional Care Management and Chronic Care Management billing opportunities for primary care physicians. For example, reimbursement for a variety of ophthalmology surgeries was cut this year by up to 33%.

The percentage of Americans with private insurance has been steadily declining for decades, as you can see in the chart below. This trend, coupled with reduced payments from Medicare and Medicaid, make attracting commercially insured consumers to a provider’s patient base more critical than ever.

Payer mix can vary wildly from one community to the next. For instance, the private payer percentage is high in New York City’s Manhattan borough because so many residents are either employed or affluent. Yet just a few miles away in the borough of Brooklyn, the payer mix has been described as “dismal” – with fewer privately insured residents to offset the rise in Medicare and Medicaid patient volume.

When health systems can increase the percentage of private payers – even by a percentage point or two – it has a big impact on their bottom line. And the most efficient way to do that is to engage area employers who offer private health insurance to their employees.

Encouraging Employees To Engage
There’s an old adage in medicine that goes, “It’s not the patients who present that worry me; it’s the ones who don’t.” By some estimates, nearly 50% of Americans don’t have a designated primary care physician. They either don’t go the doctor due to excellent health (common with young Millennials), or else they don’t present until there’s an emergency or health crisis. For emergencies, many people flit from one urgent care clinic to another, never establishing a home base. And for health crises, they often wind up in the emergency room – which causes overall healthcare costs to soar.

While most employers have financial responsibility for the healthcare of their employees, they typically have little or no baseline data on the health of their workforce. But when they partner with a health system equipped with the proper population health tools, it’s much easier to proactively identify employees who are at risk of developing chronic conditions that account for the lion’s share of healthcare spending.

When a health system strategically collaborates with area employers, the advantages include:

• Ability to identify the most pressing health issues facing the workforce by location. For example, stress may be a bigger problem for an office in San Francisco, while obesity is problematic in a factory in Tulsa and smoking is a concern in a Knoxville distribution center.

• Ability to identify at-risk employees upstream before their health conditions worsen

• Educating employees on the consequences of bypassing regular check-ups and screenings

• Creating a real-time database to promote appropriate services that drive outpatient and service line volume

• Using the database to increase time-sensitive visits (such as mammography reminders to employees who have gone more than one year since the last exam)

• Arranging on-site health screenings and educational events where employees can build relationships with area physicians

• Creating an opportunity for selling exclusive or preferred insurance networks

• Counseling employees who have the choice of different plans (e.g., Kaiser or Blue Cross) and participating in open enrollment

• Helping employers design more effective incentive programs. For instance, paying employees a cash bonus for meeting health milestones may work better than reducing the cost of their health premiums – or vice versa.

One of the biggest obstacles to effective population health management is inertia: the tendency for things to stay the same (e.g., the employee with a weight problem who never does anything about it). That’s why a hospital/employer alliance is designed to keep things moving with ongoing education and incentives. For example, a worksite “lunch and learn” about sleep apnea can help identify employees who never even suspected they had a problem. That in turn drives more revenue for a health system’s sleep clinic.

How Three Systems Improved Payer Mix
• A 400-bed independent suburban hospital in the Midwest has launched an employer engagement program as a revenue growth and payer mix enhancement strategy. Over time, the hospital has engaged 102 companies representing nearly 400,000 covered lives.

Through interaction with these employers via on-site screenings, education and a wellness incentive platform, the hospital has built a database of 29,613 new commercially insured consumers. Their health profiles contain a wealth of information on health conditions, history, demographics and current biometric readings (e.g., blood pressure, lipids, glucose and Body Mass Index), allowing the hospital to target specific mailings to consumers based on their likely healthcare needs. Over the course of a year, the hospital reached out to more than 7,000 consumers with a variety of health conditions via coordinated direct mail and email campaigns. The hospital turned to its third-party CRM provider to analyze results. They were able to isolate those consumers to whom they had provided no services in the prior three years other than through their employer strategy. Of the more than 3,000 consumers that fell into this category, 19.6% of them responded and had at least one service through the hospital or affiliated physician network. These 610 new patients generated $3.3 million in commercially reimbursable charges over the course of the year studied.

2017 Aegis Health Group, Inc., All Rights Reserved.
8 Cadillac Drive, Suite 450, Brentwood, TN 37027
P: 615.665.4200 F: 615.665.4500
Privacy Policy