The new hospital bill: 7 things consumers want

Consumers consistently rate hospital payment and billing processes worse than pharmacies and insurers in terms of convenience, transparency, affordability, reliability and seamlessness, according to a recent survey and report from PwC's Health Research Institute.

In fact, nearly every other industry is more advanced than healthcare in terms of offering real-time, transparent payment options. Consumers are used to accessing information through a variety of channels, comparing prices and ratings, making decisions and managing payments. Now as they are increasingly pushed into the center of the healthcare world in terms of financial responsibility for high-deductibles, consumers are becoming shrewder about healthcare decision-making and pushing for a new billing landscape.

Here are seven things consumers want out of their healthcare billing and payment processes, based on HRI findings from a survey of 1,000 US adults, commercial claims information from 34 million Americans and interviews with healthcare executives.

1. Upfront information. HRI found consumers across demographics overwhelmingly wanted more transparency in the healthcare payment process. They want to know how much treatment and services will cost ahead of time, at the point of care and for any follow-up care. Millennials, especially, are interested in this information, according to HRI. Compared to the general population, millennials ages 18 to 34 years old were most likely to ask for a discount, ask for a cheaper treatment option, request a price check or appeal an insurance decision. In order to challenge their bills and costs, they need more transparent information. However, as the report notes, real-time adjudication of claims at the point of service is still a major roadblock to helping consumers compare their options and plan financially.

2. Discussions about cost. Consumers — including millennials, chronically ill patients and the affluent — stressed in the survey that they wanted physicians, pharmacists and other providers to sit down with them and discuss costs. Approximately 47 percent of survey respondents in poor or fair health told HRI they didn't understand the cost of their care beforehand. HRI recommends insurance companies, physicians practices, clinics and hospitals proactively education their clinicians so they can have informed cost conversations with patients who are making decisions about their care.

3. One bill. Paying medical bills is not simple. Consumers receive a multitude of paperwork and it is unclear how much they owe, when they owe it and how they should pay. Among survey respondents who report income exceeding $100,000 per year, 25 percent said it was not easy to find how much of their bill they owed and 19 percent said paying bills was not simple. For respondents in poor or fair health, 31 percent said it was not simple to pay their bills and 28 percent were not confident their bills were even accurate.

In the report, HRI highlights an initiative taken by Phoenix-based Banner Health to move to a single bill. Instead of receiving a mountain of bills and paperwork, patients receive and pay one bill and then Banner splits the payment among those involved. After a year of planning and implementation, the single-bill system has helped Banner collect more, Betsy Sullivan, Banner Health's vice president of revenue cycle, told HRI. The system has also seen a positive response from consumers.

4. Claim-less services. Another way to simplify the payment process for consumers is to eliminate claims, especially for simple services. In 2012, the average annual deductible was $1,000, and HRI found approximately 80 percent of consumers paid less than $1,000 in out-of-pocket expenses. In 2015, Americans are expected to spend $345 billion on out-of-pocket healthcare costs and an additional $271 billion on health and wellness products and services, according to the report.

Because deductibles are so high, many consumers are ready for the true retail experience when it comes to simple healthcare services. They want a streamlined process without claims and a fixed, upfront cost for services. Some executives believe these flat-fee services could make way for Netflix-like subscriptions for healthcare services once the market has settled and consumers know how much they are willing to pay, according to the report.

5. Multiple payment channels and payment options. Hospitals and health systems will collect more if they provide patients with payment choices. "Payments are channels too," Bill Marvin, CEO of billing services company InstaMed, told HRI. "You have online, mobile, point-of-service, mail order, lockbox. You want to give your consumers as many ways to pay you as possible. Not one channel, my way or the highway." Not only should patients have access to multiple pathways to pay their bills, but they should also have multiple payment plan options. Rather than keeping a laser focus on submitting claims to insurance companies, providers should diversify the payment options they offer. HRI suggests extending credit and offering smaller payments for longer periods of time. With more financing options, willing patients will also be able to pay.

6. Digital options. Offering digital options for pre-service price shopping, online patient portals, apps and even telehealth services have shifted in importance from additional benefits to necessary services, athenahealth CEO Jonathan Bush told HRI. This is where healthcare especially falls behind other industries. The digital payment process must be simple, private and secure. Focusing on the front-end user experience is especially critical when considering patient satisfaction and digital payment services. Results of HRI's survey showed that the billing experience can affect how patients view a hospital or payer's services.

7. Integrated payment systems and point solutions. As part of all of the above factors, offering consumers an integrated way to pay health costs and medical bills — all in one place and linked to their bank accounts, flexible savings accounts, etc. — would make it simple for consumers to pay their bills and easier for providers to collect payments and track patients' healthcare services, especially if they go claim-less. One such portal, called Money2 for Health, first offered by Citi and Aetna, allows consumers to view all their bills on an online portal and pay them with linked bank accounts, credit cards, flexible savings accounts or HSAs. Many more providers are beginning to offer consumers point solutions similar to Citi's to spur collections. These include e-wallet options, tokenized transactions and loyalty programs.

 

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