3 Steps to balance collections and patient satisfaction

The healthcare industry in the United States accounts for about 18 percent of the nation's economy, or roughly $9,523 per person, according to the Centers for Medicare and Medicaid Services. It also provides about 18 million jobs, a number the U.S. Department of Labor expects will reach 21 million within the next decade.

In addition to playing an outsized role in the U.S. economy, healthcare itself is undergoing an immense change. As the Affordable Care Act is fully implemented and reimbursements shrink, technology will continue to play a big role in making healthcare delivery and administration more efficient. The industry also is transitioning from a fee-for-service model to an outcomes-based system during the next few years—a switchover that will further alter the culture and business model for many providers.

Patient cost sharing is a big part of this paradigm shift. According to The Advisory Board Company, high-deductible plans a decade ago comprised roughly 5 percent of the market; today, they make up more than 25 percent. In fact, a recent American College of Healthcare Executives survey showed that hospital leaders today consider bad debt and the "transition from volume to value" two of their top three financial challenges—above government funding cuts, staffing costs and competition from other providers.

Individuals now routinely contribute 10 percent or more of the overall cost of their healthcare as part of this cost shift. Naturally, they're paying more attention to what they're charged, shopping around, prioritizing medical services and placing a high value on customer service. And hospital executives are taking notice: In the 2015 ACHE survey, patient satisfaction was the No. 5 biggest issue hospital CEOs said they faced, ahead of physician-hospital relations, population health management and technology.

But happy patients and financial success are not mutually exclusive goals. By following these steps, hospitals can both increase patient satisfaction and improve cash flow:

Step No. 1: Assess front-end processes

More than one-third of privately insured individuals received an unexpected hospital bill within the past two years, and in excess of 33 percent did nothing to resolve it, according to a 2015 Consumer Reports survey. That's why patients must be informed about what they'll owe for care—and as early in the revenue cycle process as possible.

To avoid medical necessity denials, payer authorizations must be obtained in advance. Patients also should understand what their insurance covers, likely out-of-pocket expenses, payment plan options, and provide patients with verbal and written explanations of hospital financial policies. Strict point-of-service policies will mean reduced days in A/R, optimized cash flow and reduced collection costs. And with a full understanding of their financial obligations, patients will be happier and more likely to return.

Step No. 2: Review communications policies

A severe education gap exists in today's healthcare system. According to a 2014 study by The Henry J. Kaiser Family Foundation, nearly one quarter of the U.S. population cannot define a provider network, nor do they know that out-of-network doctors work at in-network hospitals.

It's a provider's responsibility to develop policies around communicating these complex nuances. And simply mailing bills and answering inbound calls no longer suffices. Healthcare now requires a proactive approach that engages patients early in the process so that A/R doesn't age out. Early and often is a good rule of thumb for informing patients about their financial responsibility.

It's also important to understand that not all patients prefer to pay the same way, and providers must offer convenient options for all segments of the communities they serve. Communications policies should require staff to not only remind patients of scheduled appointments, but also to educate them on facility financial policies, communicate patient responsibilities and confirm insurance coverage on file.

To achieve this, the patient access team must be familiar with all payment options, such as prompt payment discounts and monthly payment plans. Also, staff members should make known all financial resources available to patients in need.

Step No. 3: Develop actionable solutions

Healthcare is the only industry in which the seller, i.e. the provider, and the buyer, i.e. the patient, don't know the sale price of the product, i.e. healthcare services. Finding successful workarounds for this structural impediment is a continual challenge for providers, which now—more than ever before—must treat patients as consumers, study their purchasing habits and implement solutions around their preferences.

In some cases, optimizing cash collections may mean providing patients with an online portal or app they can access to make payments. Others may find success with patient email or chat options. And some may find that automated outbound dialing campaigns work well with their patients. Even more than any one specific tactic, however, a provider must understand its patients and their preferences and implement practical, cost-effective solutions.

For example, J.P. Morgan Chase & Co. estimates that automated payments for healthcare services has grown by more than 300 percent in the three years leading up to 2014. This dramatic uptick undoubtedly is driven by the demands of consumers—especially younger individuals—who have grown accustomed to paying their cell phone, cable and utility bills this way in recent years.

Balancing collections and patient satisfaction will remain a priority in our competitive industry well into the next decade. But success doesn't need to be elusive. By regularly completing these steps, providers can optimize their revenue cycle and keep their patients happy.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.​

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.


Featured Webinars

Featured Whitepapers