Today, patients’ out-of-pocket financial responsibility for their care determines a larger percentage of provider revenue than ever before. And between rising healthcare costs and evolving consumer preferences, provider organizations are challenged to find new ways to maximize their profitability.
However, there are proven, effective methods for improving payment processes and collecting more quickly. The short answer? Patients want convenience—and providers who implement more modern, digital payment options are poised to thrive.
Why are flexible payment options important to patients?
Patients are increasingly ditching traditional payment methods for more convenient, tech-enabled alternatives. In 2020, a U.S. Bank survey found that 64% of healthcare consumers paid their medical bills at their provider’s office. The following year, that number shrank to just 44%.
No doubt, the pandemic has accelerated a shift in how patients pay their bills. The popularity of digital payments is taking off, with more than half of U.S. Bank survey respondents saying they prefer the ease and convenience of making contactless payments for their healthcare.
Online portals, mobile apps and mobile wallets are among the most favored of those contactless choices—all of which allow patients to pay their medical bills safely and securely from a phone, computer or tablet. In fact, nearly two-thirds of patients cite digital and tech-enabled options as their preferred way to pay.
For healthcare organizations, the ability to offer flexible payment options has become a key driver of patient retention and satisfaction. More than three-quarters of U.S. Bank survey respondents say they want their providers to offer more digital payment modalities—and nearly 60% view their providers more favorably when a contactless payment device is available at the point of service.
Here are three ways that offering patients flexible payment options can benefit your healthcare organization:
- Meet patients’ financial needs
Here’s a sobering statistic: According to TransUnion, more than two-thirds of patients with hospital bills of $500 or less do not pay them in full.
Flexible payment options can help healthcare organizations solve that problem. Payment plans, for instance, can split patients’ large balances into manageable monthly installments. In fact, U.S. Bank found that more than 80% of patients are likely to choose recurring payments if their provider offers that choice, and more than 9 in 10 say they would pay their bill in full if given a lump-sum discount.
That’s a boon for providers, too. By moving payments to the front end of care—and adjusting patients’ expectations so they are prepared to make them—healthcare organizations can increase revenue and reduce bad debt. Better yet, organizations that offer flexible payment methods are well positioned to boost patient loyalty, especially as healthcare consumerism grows.
- Make payments easier
Thanks to the speed and simplicity of digital modalities, patients are increasingly paying their bills hassle-free from their home computer or mobile phone—and for most of them, going online is the easiest way to pay.
About 1 in 5 patients in U.S. Bank’s survey say the pandemic has increased their reliance on digital and contactless payments, and nearly half say they pay their medical expenses more quickly when notified digitally—whether by email, text, app or automated phone call. By comparison, just 16% say they pay more quickly when notified by regular mail.
Indeed, digital notifications work because they leverage consumers’ existing bill-paying habits—and that’s good news for healthcare organizations’ bottom lines. With technology, providers can send billing reminders through the platforms their patients already use. The end result is faster collections, fewer unpaid balances and a more patient-friendly payment experience.
- Reduce paper waste
How many billing statements does a healthcare organization typically send before a patient’s balance is fully paid?
If it uses regular mail, the hard costs can add up. On average, it takes more than three statements— costing $5 to $15 each—to collect a patient’s balance in full. In addition, most healthcare organizations wait more than 90 days to turn overdue bills over to a collections agency—and the longer an invoice has gone unpaid, the greater the cost to collect.
Offering flexible payment options can help healthcare organizations “go paperless,” eliminating the need to repeatedly send paper billing statements. Providers with card-on-file policies, for example, can use patients’ stored credit card numbers to process their outstanding balances after insurance claims are adjudicated. Moreover, many online payment solutions have built-in email billing reminders, allowing providers to collect and solicit payments from a single platform.
The takeaway? By using technology to automate and digitize patient payments, healthcare organizations can increase efficiency, decrease billing costs and give their staff time to focus on more complex tasks.
Learn how Phreesia can help you collect respectfully and consistently at the time of service and give patients the modern, flexible payment experience they want.