In a recent article, Loyale Healthcare, LLC, a leading financial technology company serving the healthcare industry asks, “can technology save our healthcare payment system?”
A phenomenon is rattling the American Healthcare Industry in ways most failed to predict just a few short years ago. The industry calls it “Patient Responsibility”. It refers to the amount that patients owe from their own pockets after their insurance. At one time these dollars, which can be difficult and costly to collect, represented a small portion of a provider’s income. Today, it’s their third largest source of revenue.
It’s not a new phenomenon. It received substantial analysis and recommendations from industry groups such as the Healthcare Financial Management Association (HFMA) as early as 2013. But it has been gaining steam steadily as patient out-of-pocket costs for high deductible insurance premiums, deductibles and balances-after-insurance have gone up year after year.
A 2016 research report conducted jointly by the Kaiser Family Foundation and the New York Times found that in 20% of insured patients struggled to pay their medical bills. There is evidence the problem may be even more serious, with another study conducted this year by The West Health Institute and NORC at the University of Chicago. Their survey found that 44% of potential patients avoiding care because of concerns about their ability to afford it. This is important potential business that providers never had the opportunity to serve.
Higher patient costs and their concerns about being able to afford care have created a new class of patients. These technology-savvy, value-driven consumers are looking for more from their healthcare providers. Some are responding with investments in technology and process improvements. Increasingly, providers that don’t are placing themselves at a competitive disadvantage.
HFMA’s Financial Communications Best Practices, published in the fall of 2013, laid out what has continued to serve as one of the industry’s most comprehensive prescriptions for addressing the issues of rising patient responsibility and accelerated patient consumerism. Developed by a panel of accomplished industry practitioners, the document recognizes that communications and the processes underlying them are central to the goal of delivering a satisfying patient financial experience.
At the risk of oversimplifying the solution for a complex set of healthcare revenue cycle systems and processes, we have developed a measuring stick to help patients and their providers judge for themselves whether they are receiving or delivering patient-centered financial experiences.
The Patient Financial Engagement measuring stick for performance in the consumer-driven healthcare market consists of three performance categories:
1. Is it compassionate?
2. Is it open and transparent?
3. Is it smart?