What Healthcare Can Learn from the Financial Industry
Educating the Public
The financial industry has done an extremely effective job of educating the public on the benefits of long-term financial planning when it comes to things like saving for college, retirement, and estate planning. We can collectively see and understand the benefits of IRAs, 401Ks, 5
Educating the Public
The financial industry has done an extremely effective job of educating the public on the benefits of long-term financial planning when it comes to things like saving for college, retirement, and estate planning. We can collectively see and understand the benefits of IRAs, 401Ks, 529 Plans and retirement accounts. Even if we’re not currently in the position to make contributions to each of these, for most of us that is a clear financial objective. And when the time comes, we know who to call for guidance and support in establishing and growing these accounts.
The healthcare industry can learn a lot from this approach. Healthcare providers, healthcare delivery systems, and insurers must now follow suit and educate the public about the physical and financial benefits of long-term health planning, and the avenues for achieving these objectives.
In the case of investments, we have been systematically educated to understand the need for regular contributions to funds in order to grow them over time. In the investment world, contributions made today have much greater value to the bottom line 25 years from now than contributions made within a few years of disbursement. Such is the view the healthcare industry must impart on the public – an ounce of prevention today (through diet, exercise, preventative care, and financial planning) is worth a pound of cure in the future (including invasive, expensive treatment options late in life).
Building Long-term, Trustworthy Relationships
The financial industry has also found great success in building strong, life-long relationships with clients. No one questions the need for a knowledgeable, trusted financial advisor to help navigate the complexities of long-term financial planning including calculating returns on investments, growth rates, future value of money, and understanding the tax implications for each of those. Similarly, patients need a knowledgeable, trusted healthcare advisor to provide guidance and expertise for mitigating health risks and achieving desired long-term health objectives. For most patients, when there is a dramatic change in their health status, it is unclear who to call first – your primary care physician, your specialist, your insurance company? But if that patient has an existing relationship with a trusted healthcare advisor, that first call is easy, and will shed light on both the medical and financial next steps. To draw a few parallels:
- If new tax laws come into effect, call your financial advisor; if new insurance reforms are on the horizon, reach out to your trusted healthcare advisor and adjust your plans accordingly
- If the stock market takes a dive, call your financial advisor; if your health status changes dramatically, reach out to your trusted healthcare advisor
- If you receive a major financial windfall or inheritance benefit, call your financial advisor; if you have changes to your comprehensive health insurance benefits or health savings plan, it’s best to have your healthcare advisor on speed dial
While this type of relationship offers obvious benefits to the patient, the benefits to the healthcare industry as a whole are equally compelling. Operationally, trusted healthcare advisors can help rationalize hospital and office visits by coordinating preventative procedures well in advance and during off-peak times, and by proactively managing patients’ health in the near-term to dramatically reduce the need for unscheduled emergency procedures in the long-term.
Embracing this approach also has significant positive financial benefits for the industry. Long-term relationships with patients allow physicians, healthcare delivery systems, and insurers to more effectively manage their revenue cycles through proactive scheduling and realistic revenue forecasting. This approach also dramatically increases overall patient satisfaction and, in turn, increases the lifetime-value of each patient relationship across the organization.
As the US population ages and the healthcare industry is tasked with operating on ever shrinking margins, looking for best practices across all industries will become a necessity. Luckily, there is much to be learned and applied if we simply take the time to find alternatives and apply them effectively.