Empowering Healthcare Consumers: Choices in Cost Management

In the second part of our three-part Business of Healthcare series, discover how informed healthcare choices and innovative strategies empower consumers, optimize healthcare spending, and improve patient care.

When thinking about healthcare options today, choice plays a pivotal role in managing costs and improving outcomes.

Healthcare expenses continue to rise, and both insurers and consumers are feeling the financial strain. Traditionally, employers have been the primary source of health insurance for many, but rising costs have led them to offer high-deductible health plans, shifting more financial responsibility onto employees. This shift highlights the importance of choice in healthcare spending and management. 

At KI, we are focused on navigating the complexities of the evolving healthcare landscape to ensure our furniture solutions meet the changing needs of the industry. To gather insights on current healthcare trends and challenges, we’ve engaged with a variety of experts in the healthcare field.

In the second chapter of our Business of Healthcare series, I’m excited to introduce Patti Arendt, MBA, CPM, Director of Medical Specialties at ThedaCare, to share her insights on choice in cost management for healthcare design.

The Rise of High-Deductible Health Plans

“In today's market, healthcare has become increasingly more expensive for insurers and members, who we should start referring to as individual healthcare consumers,” Patti explained. “Employers are still the primary source for insurance for many individuals and families. Due to the rising costs of healthcare, many employers have opted to offer high-deductible health plans as primary plan options for employees and plan members.”

To navigate these high-deductible plans effectively, both employers and employees must become educated consumers. Patti emphasized that employers can play a crucial role by providing education about healthcare spending, which helps employees manage their deductibles and can lead to lower insurance renewal rates and deductibles over time.

This educational approach empowers employees to make informed decisions, potentially reducing their out-of-pocket costs and benefiting the overall financial health of the organization.

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Shifting Toward Value-Based Care

This transition represents a strategic choice that healthcare systems and insurers are increasingly adopting.

The historic fee-for-service (FFS) model determined payments based on the treatment received, aligned with the “usual and customary” fee. As healthcare costs have surged, largely due to individual lifestyle choices related to diet and exercise, payors are preparing to shift from the traditional FFS model to value-based care (VBC).

VBC is a newer approach that focuses on patient outcomes and the quality of treatment, rather than the volume of services delivered like the structure of the FFS model. This model encourages providers to become Accountable Care Organizations (ACOs) that manage the total cost of care (TCOC) and are rewarded for keeping expenses below government benchmarks.

Employers are leveraging this shift toward value-based care to negotiate direct risk-based agreements with local health systems. By analyzing their employee population's overall health, employers can assess metrics such as the medical loss ratio (MLR), which measures the proportion of premiums spent on medical claims. A lower MLR indicates more efficient healthcare spending, allowing employers to invest in operational efficiency, capital, and employee benefits.

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Mitigating Costs with Smart Strategies

Evaluating healthcare spending also involves considering the costs of out-of-network care and emergency room visits.

“Employees often incur higher out-of-pocket expenses and employers face increased costs when employees use out-of-network providers or seek emergency care unnecessarily,” Patti explained.

To mitigate these costs, employers are using strategies like higher deductibles for emergency room visits or encouraging employees to choose more cost-effective care options.

“This provides more of an incentive for individuals to consider other options before paying higher costs out of pocket to be seen at an ER,” she added.

Population health initiatives further illustrate the impact of choice on healthcare costs. Regular screenings and management of chronic conditions can significantly reduce overall healthcare expenses. For instance, maintaining regular visits with a primary care provider can help manage chronic conditions and reduce the need for more costly interventions.

Innovative approaches such as direct-to-employer care models and mobile health services are also emerging. These models offer onsite or near-site services, reducing costs and providing convenient access to care. Examples include mobile mammograms, MRIs, and ambulatory surgery centers (ASCs), which provide services at lower costs compared to traditional hospital settings.

“Individuals also have shorter stays in an ASC, which means they can get back to work sooner for these less severe procedures," Patti highlighted. “Each of the innovations serve as a positive impact for employee presenteeism and decrease employee absenteeism. In return, employees appreciate not having to use excess vacation time to complete these services and employers observe greater productivity and revenue.”

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Informed Choices: A Pathway to Cost Management & Enhanced Patient Care

Ultimately, the ability to make informed choices about healthcare—whether through preventive care, thoughtful treatment options, or innovative services—empowers both employers and employees to manage their healthcare journeys more efficiently and effectively.

The resources optimized through these thoughtful decisions can be reinvested to keep facilities current with essential improvements, including furniture that enhances patient experience. Our team at KI can provide tailored solutions that meet aesthetic needs and support functionality, ensuring that healthcare environments remain welcoming and efficient as they evolve.

Consider our Infinity From KI process for tailoring our standard portfolio options to meet your unique needs and requirements for enhancing patient care. Our dedicated sales specialists are expertly trained and at-the-ready to support your healthcare design project. Find your local specialist here and contact us today!