Patient collections have long been among the most significant operational and financial headaches for medical providers – resulting in lost time and money.
For example, patient collections take more than a month for 74% of providers, according to a recent survey. For two-thirds of providers, patient receivables represent their primary revenue concern.
Many of providers’ challenges associated with collections stem from the “patient-as-a-payer” trend, in which patients have been forced to assume a greater proportion of their own medical bills due to a range of factors such as the proliferation of high-deductible health plans. In the survey, 65% of providers said they have seen an increase in patient financial responsibility.
However, there is another less-obvious culprit that creates additional difficulties with patient collections: manual, paper-based processes. In many ways, healthcare has failed to maintain pace with the technological advances in other industries, and the numbers tell the story: 88% of providers reported relying on manual and paper-based transactions to collect patient financial responsibility, 73% of providers use paper and manual processes for check-in, and only 23% of providers offer electronic statements, according to the survey.
In short, providers’ inability to engage patients is costing them. Patient engagement primarily depends on two factors – making time to understand patient needs, then connecting patients with the resources that fulfill those needs.
Patient engagement is of particular importance in the payment process. By taking steps to better engage patients – such as delivering the right payment message to each patient at the right time, boosting price transparency, and offering omnichannel payment options, and – providers can enhance collection rates.
Simply stated: Better-engaged patients are better-paying patients. Here are five reasons why:
Patients who can properly interpret bills are more likely to pay: In some cases, affordability is not the reason that patients fail to pay their bills. Rather, the reason is incomprehensibility.
Another patient survey revealed several factors outside of affordability that led patients to delay or avoid payment. Thirty percent of the surveyed patients blamed “confusion about how much insurance will cover what patients owe;” 30% cited “receiving bills for services patients don’t think they should have to pay for;” 25% named “waiting to receive the final bill so they are sure of the amount owed;” and 11% of patients pointed to “uncertainty about what payment method to use.”
To help patients overcome these issues, it is important for providers to begin engaging with them before an appointment. Before every visit commences, patients should understand the amount they’ll be charged, how much insurance will cover, and what they’ll be responsible for out-of-pocket.
Early communication equals better engagement and more prompt collection: In the realm of patient engagement and collection, timing is essential. Once a patient leaves the office, the chances of obtaining prompt payment decline significantly, meaning providers must strive to capture payment in conjunction with the visit.
A patient survey from TransUnion found that 60% of patients were at least somewhat likely to pay their bill upfront if a cost estimate is offered in advance or at the time of service, but only about half of patients were given clear cost estimates prior to service.
It follows, then, that providers should strive to commence the payment process prior to the visit. For example, when sending appointment reminders, verify patient insurance and demographic information is up to date and present expected payment details, including charges, copays, and the effect on the patient’s deductible. Going over all of this information with patients pre-appointment saves times for both patients and staff.
Provide omnichannel payment options to enhance patient convenience: An essential element to decrease the lag between billing and collection is to verify patients’ preferred method of communication and consistently use that channel.
An omni-channel approach can include communications via email, call center, Interactive Voice Response, paper, kiosks, point of service, guest pay, payment plans, or text message. Convenience is king and offering a wide array of options maximizes patient convenience, as some patients may feel comfort with certain modes of payment (such as paper bills, for example) while lacking familiarity with others (e.g., point-of-service kiosks).
Price transparency creates greater patient satisfaction: Surprise bills occur when patients are confronted with larger-than-expected balances due or providers fail to deliver a clear explanation of how insurance benefits are applied. Such bills can create patient stress and anxiety and lead to negative feelings toward providers.
Some patients place such a high priority on price transparency that they’re willing to pay for it. For example, an Advisory Board brief found that 74% of consumers would prefer to pay $50 out-of-pocket than be unaware of the cost of a primary care visit. By offering greater price transparency, providers can boost the efficiency of the payment process and help avoid the negative feelings associated with surprise bills.
Payment plans offer greater flexibility, boosting the chances of collection: During 2019, more than one-fifth of adults had to pay major, unexpected medical bills, with the median expense between $1,000 and $1,999. Overall, 18% of adults reported that they had unpaid debt from their own medical care or that of a family member, according to the Federal Reserve.
To help patients cope with sometimes unexpected or non-routine medical bills, providers can offer patients flexible payment plan options. The flexibility provided by payment plans often gives patients greater feelings of control over their bills and satisfaction with their providers.
Given the challenges associated with COVID-19 and an economy operating at less-than-full capacity, patient collections are likely to remain a potential barrier to providers’ financial success into the foreseeable future. However, improved patient engagement in the form of clear pre-visit communication, omnichannel payment options, and greater price transparency represents the competitive advantage that can help providers boost collection rates.
Learn more about Ryne Natzke
Check out The Tate Chronicles where host Jim Tate talks to Ryne. Ryne is responsible for managing Sphere’s healthcare strategy and largest, strategic accounts across Sphere’s key verticals, including both large merchants and software partners. He brings more than 10 years of experience in the health IT world and has worked at or with many of the leading players in healthcare.