From time to time, this blog will present Voices of Sightpath, featuring guest posts from others within our organization. Our first in this series comes from Joel Gaslin, Vice President of Sales for Sightpath Medical:
The Connection Economy
My favorite business author, Seth Godin, said recently in his new book the Icarus Deception that the world economy is now functioning based on connections rather than industrialization. Whoa, that’s a profound statement! And it’s exactly why I like to read Seth’s art so much.
The days of trying to do things on an industrial scale seem to be in the rear-view mirror. Is there still a reward for figuring out the least expensive, quickest way to do something? Perhaps, but it really depends upon the topic.
For instance, take the Ophthalmology industry; one that is suffering greatly reduced reimbursement for the delivery of a service that is the cornerstone of what it was industrialized to do. Ophthalmic surgical providers have enjoyed the benefits of a third party payor in the Medicare based system that, for most participants, has treated them pretty well for about the last 30 years. With spending cuts necessary in Medicare, significant professional fee reductions have happened, deeper cuts are scheduled and these may be enacted soon. Where is this all going and how is it related to “the connection economy?”
In May of 2005, CMS adopted patient shared billing. At this time, surgeons were given the opportunity to begin to re-engineer their practices to offer a basket of non-covered refractive and presbyopia correcting services for sale to patients. The patient does not have to give-up the underlying benefit of standard cataract surgery, but does have the option to purchase some upgraded products and services which, at their core, have the goal of a reduced dependency on eyeglasses by the patient. When a patient selects this option, it results in an increase in product cost and cognitive work by the surgeon and his/her staff.
Patient shared billing is a tremendous opportunity that actually shows a good deal of foresight by the folks at CMS. At least to this citizen. And you don’t always see that with government so maybe there’s some hope…
Back to the story. Almost eight years later, this patient shared billing scenario only occurs in 14% of the ~3,500,000 cataract extraction procedures performed in the United States. The stated reasons are that patients won’t pay for additional services and that the implant technology is not “quite there yet.” The winds of change, however, are blowing.
While both of those reasons may be valid in the mind of a surgeon, this is how I, as a business person, would address those:
1. People will always buy value and despise being sold. Data shows that people trust physicians and that they do wish to be educated by them. So, educate, don’t sell. It works.
2. If the surgeon believes that the technology “is not quite there,” he can’t educate people about it because he talks them out of wanting it in the process of explaining why it’s not a good option. This scenario is intrinsically related to the first point because, as you believe, so shall it be done. From a technology standpoint, this argument of something better is coming can go on ad infinitum. The simple fact is that what we have today is the best that is available for the person making the decision at that particular point in time. That’s their reality. Why not just present them the facts, believe that it is best and set-up your practice so that the connection that you make when a patient agrees to pay extra is a good thing – not a stick in the spokes of the practice patient flow. Treat them differently, celebrate both their choice and the faith that they’ve placed in you and watch your upgrade adoption rates soar. Oh, and those who opt only for the “standard procedure,” give them just that and nothing more. That’s not unethical, it’s just good business.
So where does this leave us? I am of the opinion that Medicare has created a situation for a long time where surgeons felt adequately compensated for what they were doing, got better at doing it, did it faster with good results and that patient shared billing offered a glimpse of the future cataract surgery revenue model. Those who have chosen to embrace this opportunity in their practices may be insulated from the cuts that will come while those who are 90% dependent on Medicare, maybe not so much. It’s not too late, the major push is still coming and the people coming into the system have broken every economic barrier that has come before them. Why not this one too? If you offer value and service, people will pay for it.
If you want to pick one strategy to start this transition with, evaluate situations where your practice may have an opportunity to establish a connection with patients. Do these touch-points really see the world from their point of view? Evaluate things like patient education materials, staff training on new technology, block scheduling, on-time office appointments, on-line scheduling, phone training, regular communication with past patients. Are these all built with the patient in mind or are they off-the shelf, “I’ll-get-to-it-later” types of solutions that neither harmonize with your message nor lead to a connection with the patient? It’s a lot of work to make a meaningful connection, but to me, it’s what makes the world a wonderful place to be.