"Priceline" Hospital Marketing: Will Patients Trust in “Lowest Bidder” Healthcare?

By Stewart Gandolf, Chief Executive Officer

golden eggThe big-picture objectives of the “Bundled Payments” initiative seem worthy: “Better Health, Better Care, Lower Costs.” But we have to wonder if hospital marketing and advertising will find itself answering patient concerns about trusting their wellbeing to a “lowest bidder” system?

Under a pilot program announced recently by the Department of Health and Human Services, they said, “Bundling payment for services that patients receive across a single episode of care, such as heart bypass surgery or a hip replacement, is one way to encourage doctors, hospitals and other healthcare providers to work together to better coordinate care for patients both when they are in the hospital and after they are discharged. Such initiatives can help improve health, improve the quality of care, and lower costs.”

In their coverage of the new initiative, Kaiser Health News wonders if Medicare Is Taking A Page From Priceline. They said, “It could be called ‘Name Your Own Price’—except that’s already taken by a certain online travel website that has a certain Star Trek actor as its pitchman. But the principle is the same.”

The Medicare pilot program “will pay participating hospitals, doctors and other health providers one, ‘bundled,’ payment. To participate, providers will have to bid less, in total, than what Medicare would pay each provider separately. The traditional Medicare program pays each hospital and doctor a separate fee for its services, which critics say leads to uncoordinated care and incentives to drive up Medicare bills.”

Medicare currently makes separate payments to providers for the services they furnish to beneficiaries for a single illness or course of treatment. Under the Bundled Payment initiative, instead of a surgical procedure generating multiple claims from multiple providers, for example, the entire team is compensated in a manner that provides incentives to deliver healthcare services more efficiently while maintaining or improving quality of care.  Providers will have flexibility to determine which episodes of care and which services would be bundled together.

It remains to be seen how this program will eventually roll out, and it’s worth watching by hospitals, providers and patients. And while nobody wants to be “overcharged” for anything, we suspect that a typical patient will not be concerned with the billing and payment mechanics. They’re looking for better health and a positive outcome.

One of the potential hot issues for hospital marketing, advertising and public relations could be a perception by the patient public that the quality of care has been reduced by a “lowest bidder” system. Click here for more about bundling payments. And let us know what you think. How do you expect your target audiences to react, and how will you answer the challenge?

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