It’s even more tense when someone’s health and well-being is on the line. Given the rise of high-deductible plans, and the commensurate rise in patient self-pay, healthcare providers must adjust swiftly to this new operational reality.
Nearly 40 percent of US adults are on a high-deductible health plan1, and not surprisingly, self-pay after insurance payments is a growing part of the payment mix for hospitals and health systems. But the percentage of actual payments received is challenging: according to a Crowe Horwath study, average self-pay payment is 10.9 percent across all inpatient Accounts Receivable, and 18.2 percent across all outpatient AR2. Yet as they balance the threat of reduced collections with the need to meet quality metrics and pay-for-performance models, providers don’t want to be a bank — or worse, a collection agency.
On the patient side of the equation, most want to pay their provider, but they simply can’t. Research from the Federal Reserve indicates that 54 percent of Americans lack the funds for unbudgeted expenses.3 More than half of Americans have less than $1,000 in a savings account, and 39 percent have no savings at all.4
A $5,000 healthcare bill is too difficult to pay off entirely for most patients. By offering patients the option of a payment plan, in the same way consumers have become accustomed to paying for other large purchases, providers have a new tool to help them boost collections from this growing segment of the patient population.
Providing payment plans isn’t a one-size-fits-all solution; it requires flexibility and persistence. When it’s time to discuss payment arrangements with patients, here are three keys to effective patient financial engagement to keep in mind:
• Compassion: All patients should be made aware of all the options they have, including the option to pay over time via a payment plan. A compassionate, patient-friendly approach – and not one based on fear or intimidation – increases patient satisfaction and generates results. Patient pay solutions that offer no interest, no application and no impact to credit score help align patient and provider interests and reinforce the hospital or health systems’ mission as a caring, compassionate medical provider.
• Convenience: An effective patient pay solution meets patients where they are: Are they a Medicare recipient or a young professional? Would they be a good fit for discount programs and/or income-based options? Perhaps they’re ready to make payment decisions before admissions or need more time. It’s important to make patients aware of their options throughout their financial journey, and provide convenient, flexible and secure ways to pay, whether it’s via check, online or cellphone.
• Consumerism: Patients are consumers. The more they are accountable for their health expenses, the more they will make healthcare decisions based on cost. Many times, this leads them to forego care because they cannot pay in full. For every other major purchase in their lives — cars, homes, furniture — they can pay over time. They are now demanding the same flexibility when it comes to their most important investment of all – their health.
Research bears out the importance of compassionate, convenient communication with patients as consumers: Patients who are happy with their billing experience paid their bills in full nearly 75 percent of the time, and 95 percent would return for future service. A whopping 82 percent would recommend the hospital to a friend. The picture is a bit bleaker among those who were unsatisfied with billing: only 33 percent paid their bills in full, 58 percent would return for future service, and just 15 percent would recommend the hospital.5
A positive billing experience shows up in hospital margins too. According to 2015 Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey results from the Center for Medicare and Medicaid Services (CMS), patient satisfaction ratings can fall more than 30 percent from post-discharge through the billing process. Hospitals with excellent HCAHPS patient ratings between 2008 and 2014 had a net margin of 4.7 percent, as against 1.8 percent for hospitals with low ratings.
Investing in effective financial engagement and serving as a resource for patients throughout the billing process will not only increase collections but also benefits patient loyalty and satisfaction.
Craig Hodges is CEO of CarePayment, a patient financial engagement company that partners with healthcare providers to offer flexible, easy to understand, zero interest loans to patients.
1 “CDC: Nearly 40% of US adults have high-deductible health plans”
https://www.beckershospitalreview.com/payer-issues/cdc-nearly-40-of-us-adults-have-high-deductible-health-plans.html
2 “Revenue Recognition and High-Deductible Plans,” Crowe Horwath, March 2017.
3 “Report on the Economic Well-Being of U.S. Households in 2016.” Board of Governors of the Federal Reserve. May 2017. See p. 23. https://www.federalreserve.gov/publications/files/2016-report-economic-well-being-us-households-201705.pdf.
4 “Here’s How Much Money Americans Have in their Savings Accounts,” https://www.cnbc.com/2017/09/13/how-much-americans-at-have-in-their-savings-accounts.html
5 “Satisfied Patients are More Willing to Pay Their Bills,” http://www.connance.com/wp-content/uploads/78-connance_infographic.pdf
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