From navigating multiple stress points to embracing outpatient and virtual care, exciting opportunities are on the horizon. In this post, we’ll explore the top 5 financial trends every doctor must know in 2024.
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1. Multiple Financial Stress Points Limits Options
The financial situation in healthcare for the next 12 to 18 months is being depicted harshly. A gathering storm might threaten $450 billion in EBITDA, representing over half of the industry’s projected profit pool by 2027. Fitch Ratings gave the prognosis for nonprofit health systems a “deteriorating” grade.
The notion that the healthcare industry is “recession-proof” is being challenged by these financial difficulties.
In the ever-evolving healthcare landscape, doctors face many financial stress points that can significantly impact their options and decision-making.
- The rising medical malpractice insurance premiums can strain a physician’s budget. With increased litigation and high settlement amounts, it’s crucial for doctors to carefully manage this expense to maintain profitability.
- Reimbursement rates from insurance companies continue to be a source of frustration for many physicians. As payment models shift towards value-based care, doctors may face lower reimbursements for services rendered.
- The stock and bond market decreases have taken away a buffer for operating difficulty. Management of portfolios in 2023 will be hampered by market unpredictability.
- The burden of student loan debt weighs heavily on many doctors’ financial well-being. Balancing loan payments with other financial obligations can be challenging and restrict investment opportunities or expansion plans.
Unexpected events, such as natural disasters or public health emergencies, as we experienced recently with COVID-19, further exacerbate financial stress points for doctors. These unforeseen circumstances can disrupt patient flow and revenue streams while increasing overhead expenses related to infection control measures.
2. Outpatient, Virtual, and Acute Home Care are Favored Growth Strategies
One of the key financial trends for doctors is the focus on growth strategies that favor outpatient, virtual, and acute home care. This shift in healthcare delivery has been accelerated by recent events and is expected to continue gaining momentum.
- Outpatient care allows doctors to provide medical services and treatments without hospitalizing patients. By offering these services in dedicated clinics or specialized facilities, doctors can reduce costs and improve efficiency while still delivering high-quality care.
- Virtual care has become increasingly popular due to its convenience and accessibility. With advancements in technology, doctors can now diagnose and treat patients remotely through telemedicine platforms.
- Acute home care involves intensive medical treatment at a patient’s home rather than in a hospital setting. This approach allows patients with complex medical conditions or those recovering from surgery to receive personalized care in a familiar environment. It can also help alleviate hospital strain by freeing beds for more critical cases.
By embracing these growth strategies, doctors can expand their reach beyond traditional settings while improving patient satisfaction and outcomes.
3. Improving and Personalizing the Patient’s Financial Experience
Gone are the days when patients simply paid their bills without question or concern. Patients expect transparency, convenience, and options when managing their medical expenses. This concept is best depicted in HFMA’s Consumerism Maturity Model, as shown below:
Doctors are working to improve the patient’s financial experience by implementing digital tools and platforms. These technologies allow patients to easily access and understand their medical bills, payment options, and insurance coverage.
Recent research supports the argument that providers should pay close attention to patients’ financial experiences. Here are the responses of the customers in the survey:
- 61% of patients responded that the convenience of making payments is extremely or somewhat significant while deciding whether to continue visiting a doctor.
- More than 51% of patients stated they are extremely or slightly more likely to pay a bill sooner than normal if they receive a text message reminder.
- 35% of those surveyed said they “have changed or would change healthcare providers to get a better digital patient administrative experience.”
- An excellent financial experience includes “simplified explanations, consolidated bills that match one’s health plan benefits, clear language displaying patient liability and payment options.”
Doctors who take the time to understand their patient’s needs and work with them to find suitable solutions will build stronger relationships and improve patient satisfaction.
4. Growing Demand for Patient Financing
With rising healthcare costs and insurance coverage gaps, many patients struggle to afford necessary medical treatments and procedures. This has led to a surge in demand for financial solutions that can help alleviate the burden of medical expenses.
Recent studies have shown that patient financing options benefit patients and healthcare providers. By offering flexible payment plans and affordable financing options, doctors can ensure patients receive the care they need without facing significant financial strain. This improves patient satisfaction and increases treatment adherence and overall health outcomes.
A 2022 survey by the Commonwealth Fund discovered that:
- 42% of people had difficulty paying their medical bills or were still trying to pay off debt from medical expenses in the past year.
- 49% of individuals couldn’t afford to pay an unexpected medical bill of $1,000.
- When faced with high healthcare costs, many people had to cut back on other personal expenses, primarily by postponing or avoiding medical treatments and medications.
- 28% of Americans feel less financially ready to cover regular or unexpected healthcare expenses than the previous year.
5. Building Trust in Patient Care
Building trust has always been important in any profession, but it is becoming a critical success factor for doctors. Patients seek healthcare providers they can trust with their health and finances. Trust plays a significant role in patient satisfaction and loyalty.
According to a 2022 survey by HFMA, 23% of Americans refuse to trust the information they receive from doctors, while 21% said they don’t trust hospitals. This survey also stated some factors leading to “mistrust in patients”:
- Confusion for general payment (58%)
- Surprised billing (39%)
- Commodities high prices (28%)
- Decreased price transparency (26%)
What can be done?
- Doctors must be transparent about their services and costs to build patient trust.
- Doctors should be accessible through various means, such as phone calls or emails, so patients feel comfortable reaching out whenever they have questions or concerns.
- Decrease the number of vendors in the hospital and focus on trusted partnerships.
Building trust extends beyond just the doctor-patient relationship and involves the entire healthcare team. Collaborative efforts among nurses, specialists, and administrative staff create a trustworthy patient environment.
Conclusion
The financial landscape for doctors in 2024 is undergoing significant changes. Multiple stress points, such as rising costs and regulatory pressures, will continue to constrain options. However, there are also opportunities for growth by focusing on outpatient care, virtual consultations, and acute home care.
To navigate these trends successfully, doctors must stay informed about industry changes and adapt their strategies accordingly. By embracing innovative approaches and leveraging technology solutions that enhance efficiency while maintaining a high standard of care, doctors can position themselves at the forefront of this evolving financial landscape.
