With enrollment in high deductible health plans on the rise, patient payments now make up a larger share of hospital revenue. As collecting patient payments has become more important for hospitals' fiscal health, traditional means of collection fall short of meeting modern patients' consumer experience expectations.
Medical bills can place a significant financial burden on patients. It is estimated that one-half of Americans with employer-sponsored health insurance have a deductible more than $1,000. At the same time, around 70 percent of Americans have less than $1,000 in savings, which means paying for unexpected medical costs can seem like an impossible challenge for many. More than half of Americans say receiving a large medical bill is as traumatic as a being diagnosed with a serious illness. The situation is so dire that around 33 percent of Americans delay medical treatment due to rising healthcare costs.
Sarah Ginnetti, MHA, MBA, Director of Revenue Cycle at Day Kimball Healthcare in Putnam, Conn., cited the above statistics during a February 13th webinar hosted by Becker's Hospital Review and sponsored by CarePayment. During the webinar, Ms. Ginnetti discussed a new system to collect payments from patients that can boost collections by helping patients navigate the challenges associated with medical bills.
One of the reasons patients don't make payments is because medical bills are increasingly complex. "At the hospital level, there are multiple providers involved in a patient's care," Ms. Ginnetti said. "This makes it harder for patients to comb through and understand what the medical bill states and the out-of-pocket-costs they must pay."
To help patients better understand their medical bills, there is state and federal legislation moving forward to improve price transparency. Additionally, various healthcare finance companies are teaming up with hospitals to ensure patients better manage their medical expenses, including CarePayment.
Hospitals and health systems are exploring various initiatives to improve collections and ease patient's financial concerns. One key strategy is pre-payments for elective services. "Organizations are becoming more proactive by attempting to collect in advance or at least having payment conversations upfront," Ms. Ginnetti said.
Other important strategies and considerations include fixed payments for emergency room visits, medical credit scoring, online bill payment services and consumer incentives or loyalty programs.
Day Kimball Healthcare has a diverse payer mix, with 40 percent Medicare, 21 percent Medicaid, 38 percent commercial/private insurance and 1 percent uninsured or self-pay. Day Kimball struggled with collecting payments. "We were continuously looking for ways to better manage our in-house payment process," Ms. Ginnetti said. "However, we were finding it was becoming more complex without the right infrastructure in place."
When Day Kimball began strategizing a new approach to patient collections, there were hesitations. Some leaders expressed concern that a new system would only add to problems the hospital already faced. Some leaders were also unsure how staff would react to the changes of learning a new payment system or if patients would be turned away due to bad credit.
It was clear that that a new system would offer a solution that the staff could buy into. The new system would be simple and easy to enroll in and would add no extra cost or interest to patients. Day Kimball Healthcare also wanted to launch a program that would foster trust and loyalty with patients.
After working through these considerations, Day Kimball Healthcare enlisted CarePayment to help revamp its approach to patient collections.
Results
During the 12-week installment, the hospital committed to educating staff on the new system. The commitment to employee engagement and education throughout the process helped Day Kimball Healthcare achieve buy-in among staff. Additionally, the benefits the new system delivered to patients also supported staff buy-in.
"Being able to offer patients a long-term payment plan has been a huge satisfier for staff," Ms. Ginnetti said. "What we find, is that patients are immediately relieved to hear about the long-term financing program offered. By being able to alleviate stress for patients, also alleviates stress for staff. It's a win-win for everyone."
Day Kimball has also seen significant financial improvements since partnering with CarePayment. Since the partnership launched in 2010, the hospital has recorded a $3.5 million increase in net cash and more than 9,000 patients have enrolled in the payment program.
Over the last four years, net payment dollars have grown 98.4 percent and the number of patient accounts requesting CarePayment has increased 35.8 percent. In total, net cash collected has spiked 101 percent.
On top of improving patient payment collections, the new system also reduced its bad debt write offs. "Since 2010, we have seen our bad debt write off go down by 7 percent. While our collections percentages have gone up, our bad debt has gone down," Ms. Ginnetti said. "This makes me think we've hit the sweet spot in terms of providing an affordable avenue for patients."
To learn more about CarePayment, click here.
To watch a recording of the webinar, click here.
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