When designing patient engagement strategies, there are three populations we need to understand: the Medicare patient, the insured patient, and the wild card. In this series of posts on the business case for patient engagement, we will dive into each of these populations and explore the economic principle that drives each one. Finally, we’ll discuss how organizations can provide continuity in the health care service they provide across these three populations.
The Medicare Patient in Today’s Health System
A significant challenge in serving the Medicare population is how to provide quality care while still ensuring financial stability and growth. Looking at the current state of health systems, overall they run a pretty modest profit margin of 6.5%. Overall occupancy rate is 61%, but the majority of that percentage is Medicare patients. This group of patients runs about a -5.4% margin and holds a disproportionate share of the occupied beds in the health system per hospital. What this means is that Medicare patients, whose numbers are increasing, must be managed effectively.
Management of Medicare Patients Today
One main focus for hospital systems today when it comes to Medicare management is reduction in re-hospitalization. Managing patients means getting the right patient into the right care setting. Is hospitalization necessary? Is this an observation opportunity? Is this an ambulatory opportunity? It might seem counterintuitive to actually have a health system aim for reduced hospitalization, but in fact no system can sustain profitability when the majority of its patients are increasingly a negative margin. So that means that the Medicare patient business case exists today without any new reimbursement models.
Hospitals try to manage their patient mix so that their population is composed of a high degree of insured patients and a sustainable degree of Medicare patients, but there are other opportunities for efficiency.
Aim for Efficiency
The business case for patient engagement for the Medicare population is initially one of efficiency. Today, the Medicare patient has an average of 14 providers when he or she is actively receiving care. The likelihood of that care being coordinated—let alone collaborative—is slim to none. The patient ends up being the person who coordinates care, the person who manages the flow of information, so it’s often done in a haphazard way. Therefore, engaging patients not only in decisions about their care, but also in the logistics of health care, will help provide efficiencies.
What does this mean? It means that Medicare patients, when in active care, are using health resources at a reasonable level and are not receiving unnecessary care.
When we focus on efficiency for the Medicare patient, we’ll see things like care coordination, follow-up, and health coaching. At Healthwise, one of our guiding mantras is “do as much as you can for yourself, get access to the care you need when you need it, and say no to care you don’t need.” This principle becomes the foundation for your patient engagement strategies and efficiency initiatives for the Medicare patient.
Come back next month to read about loyalty and the insured patient.