By Thea Garon, Financial Health Network
As the healthcare debate rages on in America, it’s not often that we stop to consider the successes of our nation’s healthcare system. But as financial service providers respond to the disruptive force of technology and the changing nature of consumer demands, they would be wise to consider how healthcare providers have traveled a similar journey to orient their services around their customers’ ultimate well-being.
For decades, the healthcare industry operated on a “fee-for-service” model. Doctors were compensated on the number of patients they saw and the number of tests they ordered. By the early 2000s, healthcare costs in the United States had skyrocketed with no sign of slowing down. In 2013, the U.S. spent $9,086 per person on health care — more than twice that of other developed nations — yet the U.S. had worse patient outcomes related to chronic conditions, obesity, and infant mortality.
To combat the rising costs of healthcare, public and private insurers have begun to compensate doctors based on the value of care they provide rather than the volume of care they deliver. This new model encourages healthcare providers to focus on preventing poor health rather than treating poor health after it happens. While the industry is still in the early days of this transformation, preliminary results are encouraging: healthcare spending in the U.S. is projected to decrease by $2.6 trillion between 2014 and 2019.
Patient outcomes also appear to be improving for companies that have embraced this model. CareMore, which operates holistic care centers for the elderly, receives an annual per-patient fee from Medicare, allowing it to focus on high-quality, preventive care. The company is achieving results other providers can only dream about, including hospitalization rates 24% below average and hospital stays 38% shorter. When Sheldon Zinberg founded CareMore in 1993, he told his partners, “If you put people before profit, everyone profits.” By 2000, CareMore was making a $24 million profit and has remained solidly in the black ever since.
As financial service providers consider the future of their businesses, they should heed the examples set by their peers in the healthcare industry. By replacing misaligned employee incentive systems, fostering a culture of high-quality preventive care, and relentlessly focusing on customer outcomes, financial service providers can ensure a financially healthier future for their customers and their businesses.
This article was originally published in the 2017 EMERGE Magazine. Register now for EMERGE 2018 before Summer rates expire!
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By Financial Health Network on August 3, 2017.