The introduction of consumer-driven health plans and associated health savings accounts is being hailed as the path to managing costs. With a higher deductible and lower premium, the goal is to provide employees an incentive to avoid unnecessary services, stay healthy, participate in disease-management programs, and shop for care—not only on quality, value and service, but on price.

If consumer-driven plans live up to their potential, employers and insurers will pay less for health care.

Where does this shift in the business model of health insurance leave physicians? Consumers will use most of their direct out-of-pocket costs to pay for physician services, and that has huge ramifications on practices.

Here are trends to watch for and actions to take if you are a physician or practice manager:

Get paid now or you may not get paid later.
Accounts receivable tend to rise in health care when patients pay the bills. Most patients in traditional plans make a copay at the front desk, and insurance pays the bulk of the balance. There is little for a physician to collect from the patient later.

With consumer plans, when a physician presents a bill on behalf of the patient, most insurers will indicate that the amount payable falls beneath the deductible and is the patient's responsibility to cover. Physicians then must collect the full amount from the patient, which historically has been difficult.

Change billing methods.
Physicians will need to collect a significant portion of fees at the time of service, rather than bill patients weeks later. With HSAs, this is relatively easy to do with the debit cards paired with the accounts. Physicians need to alter their revenue cycle (the way they go about collecting money) to accommodate early receipt of the amount patients must pay, rather than bill them later.

One significant challenge is to accurately identify the contracted rate at the time of service, so practices can collect the right amount from the patient at the time of service, without having to later bill, credit, or provide a refund.

Learn the art of collections.
The new public relations ambassadors for physician practices will be accounts receivable and collections personnel. Employees will have to be retrained to handle collections in a professional and sensitive manner because the number of patient interactions will increase.

Practices will need to introduce services that correspond to this movement. Practices must be equipped to accept HSA debit cards. Customers will want online access to view bills and balances, and to make payments. Increased volume will demand that physicians adopt best practices from the credit-card and banking industries for collections. Service representatives can create loyalists through good service or antagonists through bad service.

Know the price and share the price.
When consumers pay out of pocket, they start paying attention to price. The marketplace will demand price transparency.

Physicians will need to know how competitors set prices. They will need to clearly demonstrate the value of what patients receive. If consumers will drive an hour or more to save $100 on airfare, they certainly will drive that distance to save even more for their health care.

Consumers vote with their feet.
Attracting and keeping patients no longer will be about signing the right contracts but more about properly managing the physician-patient relationship. That means making the experience the best it can be with a renewed commitment and a creative approach to customer service. That could mean spending more time with patients and making them wait less. Otherwise, patients will keep physicians waiting as they beat a path to someone else's door.
On the extreme side, some physicians have reacted by changing to an all-cash business, limiting their panels so they can spend more time with patients. Some charge patients a premium for the convenience, which many gladly pay. It may become standard practice to get back to old-fashioned medicine.

Tell your story.
Embrace marketing. If you buy into the premise that consumers will travel for services, then you need to rethink the scope and reach of marketing. Practices typically can't afford mass media in multiple markets. However, wisely diverting dollars to Internet strategies that make sense can increase exposure and reduce costs. Regional Internet advertising is starting to catch on. More than ever, practices are going to need to tell their story, share their unique selling proposition, and show value.

The growth of consumer plans and health spending accounts is well documented. Physicians need to think like a consumer and ask what they would demand from their provider in this new world. That should provide motivation for change.

Anthony Cirillo is president of Fast Forward Strategic Planning and Marketing Consulting and can be reached at Anthony@4wardfast.com. This article first appeared in the Charlotte Business Journal on March 10, 2006.