Patient financial responsibility keeps growing, creating challenges for healthcare organizations looking to collect all revenue for services provided to patients.
According to the latest “KFF Employer Benefits Survey,” the average deductible stands at $1,763 among workers who have an annual deductible for single coverage. The cost has not budged significantly over the last couple of years but is up 61 percent compared to ten years ago.
What’s more, high deductible health plan enrollment recently hit a record high, with nearly six out of ten employer-sponsored health plan members enrolled in a high deductible health plan, according to a ValuePenguin survey published earlier this year.
Growing deductibles coupled with other out-of-pocket spending has shifted revenue cycle management. Healthcare organizations used to rely on their payer partners to cover most of the costs of care. However, patients are becoming more like payers as they own more out-of-pocket for visits.
One of the biggest challenges for healthcare organizations in this new landscape is collecting the maximum amount of patient financial responsibility possible. As out-of-pocket costs increase, more patients face medical debt as they struggle to pay their bills. Providers also need to shift gears to provide convenient, consumer-friendly methods of collecting payments from patients.
To improve patient payment collections, healthcare organizations should provide a digital financial experience, simplify medical bills for patients, and provide price transparency.
Digitizing the patient financial experience
The healthcare revenue cycle is wrought with manual processes, and patient collections is not an exception. Healthcare organizations have set up more automated workflows to capture payer reimbursement, especially since providers have relied on revenue from payer partners to keep operations going. Now that patients are more accountable for medical costs, providers have to apply automation to the patient collections process and ensure it aligns with consumer needs.
Patient loyalty hinges on the financial experience. A recent survey conducted by El Studios on behalf of Cedar found that 93 percent of healthcare consumers say the billing experience could dissuade them from returning to a healthcare provider.
For most patients, it’s important for payments to be simple and easy to make. Healthcare consumers say they are more likely to make a payment on time if they receive a text message reminder about the bill and if they have an online payment option.
Providers need to offer digital payment options for patients. Healthcare organizations can leverage their patient portals for online bill pay or tap vendor partners to offer a secure website for patients to pay their medical bills. But the digital patient financial experience needs to start before a patient even receives a bill.
Patients are warming to more electronic versions of medical bills. For example, many patients have indicated that they want providers to text or email them their medical bills. Healthcare organizations should offer electronic medical bills to patients who want them, keeping in mind data security and patient privacy.
Simplify medical bills and payment
Patients tend to find medical bills confusing, especially when they come weeks after the encounter or contain overwhelming medical jargon. Bills are often unclear about what is owed, how to pay it, and when the balances are due. Consumers also report feeling confused when they receive a separate explanation of benefits letter from their insurance company, especially since it looks very similar to a bill.
To help patients navigate the financial maze, providers should clarify a patient’s financial responsibility within the medical bill, including how much is owed, how to pay, and what services are included.
Digital medical bills and payment options align with consumer demands for a more electronic patient financial experience. However, patient still report challenges with the digital experience. A 2021 survey from VisitPay found that one in five patients would rather go to the DMV than attempt to pay their medical bills online. The survey demonstrates several gaps in digital patient financial experience, with a major one being confusing online bill payment.
The survey showed that 38 percent of 1,050 patients found the online bill payment software their primary medical provider uses confusing. About 23 percent also said it’s unclear how much they owe, 24 percent said the platform lacked insurance information or an explanation of benefits, and 25 percent said there wasn’t much customer support.
Patient payment solutions aren’t living up to provider expectations either. Most providers have seen an implementation of a patient payment solution over the past five years. However, 30 percent felt the implementations were not successful and only 58 percent reported high satisfaction with their current patient payments solution, according to data from Bank of America.
Providers need to vet patient payment solutions and vendors to ensure the platform can deliver the experience patients want. This will also require providers to gauge what their patients want from the digital financial experience. Patient surveys and feedback are key to understanding consumer needs.
Provide price transparency
Unfortunately for providers, many individuals may not be aware of their financial responsibilities before visiting a physician. Many consumers enroll in high-deductible insurance plans because of lower premiums, but they do not always realize the extent of their out-of-pocket expenses.
Price transparency aims to take the guesswork out of the patient financial experience. The federal government has gone so far as to require hospitals to post all their standard charges online and provide a consumer-friendly list or system for commonly delivered services. However, providers need to go further, as evident by consumer surveys and lack of compliance.
Only about a third of hospitals are fully complying with all hospital price transparency requirements. Despite a lack of full price transparency as defined by the federal government, few adults are even aware that hospitals must post all their standard charges.
Price transparency tools that enable patients to understand costs of care can not only improve access, but patient collections. Patients need to know cost estimates before they receive care. This helps them to budget for out-of-pocket medical expenses and communicate with the provider if they need help paying. Self-service technology is especially helpful before patients come in for service.
Front-end revenue cycle staff also need a way to determine patient costs. Staff should have access to tools that verify a patient’s insurance coverage and provide a personalized cost estimate based on a patient’s deductible and other cost-sharing arrangements.
Additionally, providers should train front-end staff to educate patients at the time of the visit about what their insurance covers and what they will owe. Staff should attempt to collect patient financial responsibilities or create a payment plan while a patient is still in the office.
Healthcare organizations may also want to consider implementing payment plans for patients with higher medical bills. Front-end staff should be able to offer consumers more flexible payment options that spread out large medical bills over time.
With the shift in patient financial responsibility, healthcare revenue cycles are more dependent on the patient than ever before. Providers may need to retrain their staff to effectively communicate with patients and collect payments. At the same time, healthcare employees should also help to empower patients to take charge of their healthcare costs, which will help providers see more patient revenue.
