Patients are the new payers. We know you’ve heard it before. It’s practically the buzz-phrase of the year. Yet many healthcare organizations haven’t changed to allow for patient collections.
The facts are simple and so is the data:
- In 2017, patient responsibility made up nearly 30% of income for practices.
- High deductible health plans now cover an estimated 25% of consumers with employer-based coverage.
- Out-of-pocket healthcare costs continue to climb, increasing more than 53% between 2006 and 2016.
It’s time to make a move towards a patient financial experience model that walks the consumer through their current coverage, out-of-pocket responsibility, financing and payment options. In order to maximize your patient collections (and satisfaction), you need a comprehensive approach that identifies all sources and options for reimbursement and then communicates those options with the patient. Apparently, the other trending buzzword – price transparency – is on everyone’s lips for a reason.
According to research from Fierce Healthcare, patient satisfaction ratings fall by an average of 30% during the billing cycle. And in 2017, TransUnion reported that 68% of consumers were unable to pay after services were provided, and they expect that to rise to 95% by 2020, leaving you with a 5% chance of getting paid.
That’s why we’ve come up with 5 ways to maximize your patient collections.
1. Calculate propensity to pay. Your organization is constantly faced with the impact of not having correct patient information up-front in the revenue cycle. With no ability to steer patients into a relevant financial discussion, your back office is absorbing a lot of rework. But there are ways to change that.
Propensity to pay helps both your front and back office determine the next best actions to take with patient collections. High propensity to pay may mean an earlier, pre-service payment discussion to accelerate collection of cash. A lower score may lead to a discussion of a payment plan option. Both lead to a higher chance of collection, since staff are able to tailor financial discussions to better meet patient needs, and patients are then able to take the steps they need to find the money to pay prior to service. As it commonly understood, when patients pay a portion of their balance pre-service, they are more likely to pay the remainder of the bill.
2. Minimize early-out utilization (or cut out outsourcing altogether). Experienced, professional collection agencies ensure that payments happen in a timely manner. That’s their job. But if your staff is armed with detailed information about which patient accounts are likely to pay (and which aren’t), you won’t need to outsource. Then you can stop paying contingency fees for patient payments that were likely to come through on their own.
3. Optimize collection efforts. You may be facing high balance accounts with low propensity to pay or low balance accounts with high propensity to pay or maybe even a mixture of the two. To use staff time as efficiently as possible, however, you must use analytics to identify which of those balances will be hard to collect and which won’t. You need to analyze the effort each account requires as well as the chance of the account being paid out compared to the collections you will receive for said effort.
Staff shouldn’t just open their work queue and start cranking away on account collections. Rather, you should be reallocating your limited resources away from high-volume, low-reward work to only work the accounts that matter. A strategic use of analytics, like propensity to pay and financial aid determination, supports a personalized financial experience for patients, ultimately resulting in improved collections.
4. Implement online bill pay. According to a recent Becker’s study, 95% of patients indicate they are willing to pay a bill electronically, while only 20% of provider organizations indicate they have the infrastructure to meet this experience. But this problem is easily solved with the implementation of an online portal allowing for bill payment.
Moreover, healthcare organizations can influence the payments patients choose to make each month by recommending a default payment or suggesting to pay a larger portion of their bill in fewer installments. Either way, however, with a set plan in place and the ease of an online payment option, patients are much more likely to pay their portion of the bill.
The Wrap Up
With the ever-changing healthcare landscape, health systems are feeling the squeeze of reduced cash flow — no doubt the result of decreasing reimbursements and increased patient out-of-pocket.
Additionally, as people continue to shop around for the best healthcare experience, you must consciously strive to ensure that your organization is at the top of their list. To make sure that happens, you must streamline your revenue cycle and make a move towards a patient-centric model that is not only equipped for patient payment collection but encourages it.