In a survey of healthcare CEOs, CFOs and CIOs conducted by HIMSS and released in June 2019, 90 percent of respondents indicated that revenue cycle management was one of the top strategic technology initiatives at their organization.
In October, at Becker's Hospital Review 5th Annual Health IT + Revenue Cycle Conference in Chicago, Rectangle Health hosted a workshop to explore how technologies can enhance the patient experience and improve revenue cycle management. Mike Peluso, Rectangle Health's chief technology officer, discussed how health systems are rethinking the revenue cycle in an era of increasing consumerism.
Patient payment makes up a larger share of hospital revenue
From 2006 to 2016, the average patient deductible increased from $303 to more than $1,200, according to a 2018 analysis conducted by the Kaiser Family Foundation. This trend has complicated the healthcare revenue cycle.
"As the patient out-of-pocket goes up, the ability to collect from patients is going down," Mr. Peluso said. "It's a two-fold problem. This results in bad debt for hospitals, healthcare organizations and patients."
Although technologies exist that could help with patient payments, the healthcare sector has been slow to adopt them.
The shift toward consumerism and a more consistent patient experience
Patients are looking for their healthcare experience to be more like the experiences they have in other industries, such as retail, in terms of financial transparency. They want providers to give them estimates ahead of time. Mr. Peluso noted, "When patients have that knowledge, they are quite willing to pay. Three quarters (75 percent) of insurance consumers are willing to pay up to $1,000 of out-of-pocket medical expenses and 25 percent are willing to pay $200."
To set expectations about patient payments, some urgent care centers and emergency rooms have posted signs in their windows stating that every time non-Medicaid patients come through, they must leave a $200 credit card payment on file to receive services.
Mr. Peluso offered several recommendations to healthcare systems that want to create a more transparent patient experience:
- Deploy simple, mobile payment options. Mobile-enabled websites are essential today. One of the links on the site should be "pay my bill."
- Implement a card-on-file program. It's a standard practice in many industries to ask customers to put a credit card on file. In healthcare, this conveys to patients that payment is expected. As healthcare systems get better at patient estimation, they will be able to provide a more exact approximation of the charge.
- Offer payment plans. Recurring payments via credit card are a good option for patients with large balances.
- Utilize analytics. Analytics are fairly new in healthcare revenue cycle management. They can be used to identify patients who are not paying or certain departments that aren't collecting payments from patients.
According to Mr. Peluso, "When using technology to improve the patient experience, integration is probably the most important part. You must be able to pull the balance [from various systems] into the payment applications. System integration is expected."
Re-envisioning revenue cycle management and patient payment at an eight-hospital health system
An eight-hospital health system with more than 200 medical offices on the East Coast recently approached Rectangle Health for help consolidating its multiple patient payment portals. Each of the system's hospitals had a different patient accounting system, as well as a different practice management system. When payments were submitted, they came in different batches and no one could reconcile them. In response, Rectangle Health implemented two technology-based solutions.
The health system can now take a patient payment at the point of care anywhere in the system. The payment experience is exactly the same whether the patient is in a hospital or a medical office.
Rectangle Health also helped the organization improve the payment portal experience. All data from disparate systems is aggregated. Patients can go to one website, enter their account number or date of birth, see their balances and pay. It's simple and easy to use.
The health system was so pleased with the results that the team asked Rectangle Health to work on a consolidated payment system for the entire organization. The health system had vendors for the parking garage, cafeteria, fundraising and more. Now, the payment experience for patients and non-patients is the same.
Looking ahead, Rectangle Health and the East Coast health system plan to implement a card-on-file system. Patients will be able to put a credit card on file anywhere in the system and use it anywhere. "This will make the patient experience more like Uber. You walk in, receive your services, leave and pay in a seamless way," Mr. Peluso said.
Conclusion
Technology is a proven way for health systems to kill two birds with one stone: improve the patient financial experience and strengthen revenue cycle management. When asked whether people pose the biggest challenge to making this type of change, Mr. Peluso replied, "Patient acceptance is definitely not a challenge. Patients like to be presented with payment options that are pretty easy."