The rise of high-deductible health plans has placed a steadily increasing financial burden on patients.
Offering patients budget-friendly financing and long-term payment plans to cope with this burden can improve cash collection and boost patient loyalty, J. Britton Tabor, Executive Vice President, CFO and Treasurer of Erlanger Health System explained in a March 9th webinar.
During the webinar, sponsored by CarePayment and hosted by Becker's Hospital Review, Mr. Tabor shared how the seven-hospital safety-net health system in Chattanooga, Tenn., built financial strength and improved patient loyalty by implementing CarePayment's patient financing solution.
Why Erlanger Revamped Its Patient Payment Strategy
In January 2019, Erlanger started its journey to reimagine patient collections with several goals in mind. Some of them were to drive more cash, reduce complexity and time spent managing its in-house 24-month payment plan, and to shift the community perception of a safety-net facility meaning free hospital care.
Before implementing a patient financing solution, Erlanger's days in accounts receivable was 67, and it had only 63 days of cash on hand. Mr. Tabor noted that the financial pressures had been exacerbated because the health system was coming out of an Epic EHR implementation and there was leadership turnover in its revenue cycle department.
"Even though we had a lot of barriers, the team identified the strategy, and we wanted to move forward," Mr. Tabor said. "We didn't have the ability to [wait], nor did we want to wait, because we knew we could be offering a better solution."
The Solution
After looking at several solutions, the health system decided it wanted to offer patients an interest-free payment program to help them pay their bills over time without fear of increases in the amount owed.
"We believe that charging interest can kill a payment program," Mr. Tabor said.
In a matter of weeks, Erlanger implemented CarePayment's comprehensive patient financial solution in which Erlanger transferred its A/R processes to CarePayment and provided patients six-month to 72-month payment plans with zero percent interest.
The solution was co-branded to include both Erlanger's and CarePayment's names on its website and financial statements, which helped drive success and loyalty for the program, Mr. Tabor said.
The Results
CarePayment's payment solution has helped Erlanger increase self-pay collections by 60 percent, reduce overall A/R days from 68 to 40, and reduce self-pay balances from $145 million at its peak in April 2019 to $55 million.
The program also has touched 122,000 patient accounts since its implementation in January 2019, Mr. Tabor said. He added that the interest-free program helped boost patient satisfaction with billing.
Overall, offering an interest-free patient financing solution helped Erlanger increase patient satisfaction and boost collections.
To learn more about CarePayment's solution and best practices from Erlanger, listen to the full webinar here.