Lessons from the field: How CHI Health improved the patient financial experience with tailored payment plans

Consumers today expect the same quality of customer service and convenience in their healthcare experiences as they've come to expect from companies like Uber, Amazon or Southwest Airlines. The dynamics of the healthcare sector, however, are different from other industries. High liabilities and other factors result in affordability problems that directly affect consumers. Over the last five years, healthcare deductibles have increased by 25 percent and even a $400 balance is a struggle for nearly 50 percent of patients to pay. In response, many healthcare systems have started to devote executive-level attention to revenue cycle management.

At Becker's 5th Annual Health IT + Revenue Cycle Conference in Chicago, Flywire sponsored an executive roundtable to explore how healthcare systems can create a better patient financial experience and improved performance. John Talaga, Flywire's executive vice president and general manager of healthcare, discussed consumer attitudes toward healthcare payments. Liz Bechtle, division vice president of revenue cycle at Omaha, Neb.-based CHI Health (one of the founding organizations of Chicago-based CommonSpirit Health), shared innovative approaches CHI Health is taking to enhance the patient financial experience, while maximizing payment yields for the organization.

Payment plans offer consumers flexibility, but timing is important

To gauge consumer sentiments about healthcare payments, Flywire and Pymnts.com recently surveyed close to 3,000 individuals who had a healthcare balance of at least $150 over the past year. Nearly all participants (90 percent) indicated they wanted the option of a payment plan. Historically, however, hospitals have viewed payment plans only as a last resort.

According to Mr. Talaga, "Healthcare organizations have resisted payment plans because they could result in delayed payment over a period of time. Yet, payment plans perform well; 93.9 percent of patients pay on time or early when they have an installment amount they can afford. Default rates are low, if payment plans are set up at the right levels."

When it comes to payment plans, timing is everything.

  • 57 percent of those surveyed want an estimate of what they will have to pay either before or at the time of service, as well as the option to pay over time.
  • 36 percent preferred to have a payment plan offered with the first statement.
  • Only 6 to 7 percent want to negotiate a plan with a healthcare organization over the phone.

It's interesting to note that most healthcare systems today are serving that 6 percent. Although some are starting to address the 36 percent, not enough are responding to the 57 percent who want a payment plan up front.

When offering payment plans, flexibility and incentives are essential. Half of patients still want paper statements as a payment reminder, while a growing number prefer email or text. Incorporating fees into payment plans serves as incentive that changes consumers' behavior when choosing a plan. In healthcare, two thirds of people choose shorter terms or pay off their balances sooner to avoid fees.

Developing a modern approach to patient financial care

A good first step to engaging patients is to offer them a tailored plan that provides options for paying their balance. Consolidation of bills is also essential. Rather than sending out multiple bills from disparate billing systems, a best practice is to consolidate visits into one balance due. With this approach, patients receive one bill and don't have to decide whether to pay separate bills from their physician or hospital.

Patients should also have control over how they engage and pay. Some patients prefer to communicate via text messages, while others prefer email or paper. Intelligent notifications respond to patient activity and emphasize a call-to-action, rather than focusing exclusively on the statement cycle.

When it comes to payment, individuals may want to put a checking account, savings account or credit card on file and schedule automatic payments to pay their monthly installments. Other forms of payment like Apple Pay should also be an option, as long as it makes sense for the health system.

"Consumer reliance on self-service via digital payment channels is growing," Mr. Talaga said. "Providers that adapt to this change are in a strong position to bolster the patient experience, lower collections costs and improve collection rates." Four years ago, 18 percent of collections at health systems on average were digital. Today, it's 40 percent and in the next five years, that percentage is expected to double.

Best practices for maximizing payment plan yield

After a healthcare organization decides to offer self-service payment plans, there are several steps to take to maximize plan yields. Segmenting patient accounts to determine ability to pay and offer terms the provider is willing to accept is critical.  Offering and activating payment plans prior to delivering services to patients is also critical. Offline self-service is important to serve all patient preferences; this enables individuals to activate payment plans by writing a check for an installment amount. They don't need to go online or call to setup a payment plan.

Once a plan is activated and changes and adjustments occur, healthcare systems should automate to keep installment amounts consistent from month to month, within the provider guidelines. Other best practices include encouraging autopayment from a credit card on file and enabling authorized users or family plans. When a patient goes on a payment plan, many healthcare organizations require them to put a card on file and authorize recurring payments. This dramatically lowers default rates. Authorized users enable healthcare systems to engage family members to help pay monthly balances.

Metrics and reporting are critical for measuring what patients can afford to pay, tracking results over time and adjusting as needed. Examples of key performance indicators that drive accelerated cash collections and analyze effectiveness include average installment and term length; collection rates by select balance ranges; default, cancellation and completed plan metrics; percent of autopay accounts; percent of pay in full and percent of mobile payments.

Enhancing the patient financial experience: A CHI Health case study

CHI Health is part of Catholic Health Initiatives (now CommonSpirit), which comprises 100 hospitals in 12 markets with four core EHR host systems. Historically, the organization had highly fragmented online payment capabilities. Payment plans were manual and negotiated over the phone. CHI Health had little insight into performance metrics, but it knew opportunities existed to improve collections.

In response, the health system launched a strategic initiative to improve the patient experience and engage patients throughout their financial journeys. The goal was to create a personalized, retail-like experience based on a standardized methodology.

"We wanted to streamline the patient experience. This included qualifying patient accounts, engaging patients in tailored payment plan offers and enabling them to self-activate offers and payment options," said Ms. Bechtle.

In March 2018, CHI went live with payment plans for patients in Nebraska and western Iowa based on technology from Flywire. This division of the health system serves a broad range of customers through a mix of large acute care centers in Omaha, medium-sized facilities in rural markets and critical access facilities.

Flywire takes data from CHI’s four host systems and runs it through a segmentation process based on patients' payment history, account balances and credit history. This generates minimum payments and payment plan offers. Patients receive offers based on their communication preferences, whether paper, email or text message. CHI generates consolidated statements for patients. Each episode of care has its own section and the statement includes a comprehensive account summary with one balance and payment plan offers.

Once payments are submitted to CHI, Flywire provides an account-splitting process and manages payment posting based on preconfigured rules. Mr. Talaga explained, "The payment-posting process is critical, particularly in a consolidated environment. A payment can be distributed evenly across physician and hospital accounts, for instance. As a result, every account can get cash applied with each monthly payment."

The results to date have been significant. CHI now has 74 percent patient-activated payment plans. The organization has seen a significant increase in self-pay cash collected and in online payments. The average plan term is down to 12 months and the payment plan default rate is down considerably. Metrics for performance tracking are also much more visible.

"If you don't offer payment plans proactively, people aren't apt to ask for them and collection is more challenging," Ms. Bechtle said. "We now control the improved statement and online experience across CHI. It's user-friendly and patients understand it."


Improving the patient experience encompasses both clinical and financial considerations. A negative financial experience can have a ripple effect, negatively influencing how patients view their clinical care. CHI Health's strategic initiative not only has streamlined payments for patients, but it has also generated positive financial results for the organization.

Ms. Bechtle observed, "The more patients trust the estimate of their healthcare costs, the more consistent we are with our message and the more we make it easy for patients to successfully pay their debt, the better outcomes we see."

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