Last year, something undesirable happened in many of the nation's leading hospitals and health systems. According to the Harvard Business Review, several big-brand hospitals and health systems reported significant declines and, in some cases, net losses to the prior year's operating margins. Again this year, tens of millions of dollars in revenue, or more, suddenly disappeared. What's to blame? For starters, the aging of the baby boomers. In fact, the number of boomers going into retirement and thereby making the transition from commercial insurance to Medicare, is so impactful on the healthcare economy it's literally been coined the Silver Tsunami. This storm is hitting healthcare executives at inpatient facilities across the country as they're already juggling tough economic dynamics, with even harsher realities in front of them. As more and more commercial payers make the transition to value-based care arrangements, and as the numbers of those on Medicaid continue to climb, health system leaders are fretting about declining margins — and wondering how they can turn things around.
According to the Healthcare Financial Management Association (HFMA), in 2014, commercial insurers provided about 38% of all payments to hospitals, while Medicare accounted for 35% of payments. But as baby boomers reach retirement, those numbers are moving in the opposite direction. HFMA projects that by 2024, Medicare will be responsible for 40% of hospital payments, while just 33% of payments will come from commercial insurers.
HFMA also predicts Medicaid's part in the payer mix will be almost the same in 2024 as it was in 2014 (providing about 18% of all hospital payments). Nevertheless, the Medicaid population is on the rise along with state programs expanding under the Affordable Care Act. According to one independent analysis, enrollment in Medicaid (and its sister program, CHIP) increased by more than 16 million individuals nationwide between 2013 and 2017.
In terms of population health, it's a good thing that more low-income people now have access to medical care. Medicaid isn't pulling patients out of the commercially insured population; it's mostly covering patients who didn't have insurance at all. It's also hard to argue the importance of retirees benefiting from a government program they've paid into all their lives. For providers and healthcare organizations, however, a shift in payer mix can mean trouble. If your hospital is seeing more patients on low-paying Medicaid and Medicare, and at the same time is seeing fewer patients with higher-paying private policies, how is your organization supposed to survive?
The good news is that your hospital can succeed no matter what payer mix you currently have on your hands. The key is to focus on outreach and engagement, drawing in more of those highly valuable patients through your targeted marketing efforts — and on leveraging the data in your healthcare customer relationship management (CRM) system to get the job done efficiently and with a maximum ROI.
Digging into Demographics
There are numerous ways that outreach and engagement can drive patients — and money — to your organization. You might, for example, collaborate with local businesses to provide screenings and other care for their (commercially insured) employees in order to help them reduce worker absenteeism. Or if you have outpatient facilities with profitable service lines, you might tailor your marketing message and segment your audience to reach more consumers likely to engage with those services.
Where the healthcare CRM can make the difference in such efforts is in its capacity for segmenting your audience based on things like condition-specific propensities, household income, and geolocation, and targeting those specific groups of consumers with personalized and highly relevant messaging. By combining demographic information with data from the medical record, a CRM might help your hospital marketing team determine which consumers to contact about a product or service. Or if a CRM system shows that certain offerings resonate with a particular demographic (online scheduling or telehealth with Millennials, for example), marketers can shift their focus to them to build loyalty and draw patients from your competition.
Give Them What They Want
A good healthcare CRM will use deep learning and condition-specific forecasting to parse your existing patient base into smaller segments with similar characteristics. Patients at risk for diabetes, for example, might be highlighted and targeted with one marketing campaign, while those with depression and anxiety might be put on another list and pursued in other ways. The idea isn't to avoid patients on Medicare or Medicaid, but to grow your commercially insured population while improving your engagement with consumers across the board. And the best way to do that is with the help of your CRM — and by showing your consumers what you have is exactly what they want.
Want more insight into how a healthcare CRM can help your organization with more data-driven success? Download our Definitive Guide to Healthcare CRM.