For health system administrators, contacting patients and collecting payments on outstanding balances gets more challenging each year. Patients have struggled to keep up with rising healthcare costs since the days of the $10 aspirin. Meanwhile, many of the legacy tools that health systems use to bill and collect patient payments were designed for insurers, not your average patient. The result? A frustrating, confusing billing and payment experience for patients.
However, patient payments are an important source of income for health systems. In the aftermath of COVID-19, patient payments will play a vital role as health systems strive to recover financially.
A 3-Year Look at the Patient Financial Experience
For the last three years, Patientco has published its State of the Patient Financial Experience Report. This annual report uncovers patients’ challenges and expectations when it comes to managing healthcare expenses. It also reveals how providers plan to address their patients’ financial challenges. The 2021 report includes responses from over 3,000 patients and over 40 providers from large health systems. The full report is now available, so be sure to check it out.
In the meantime, here are key insights from this year’s survey, along with historical data from past reports. By understanding these findings, health systems can transform patient collections from a chore into an opportunity.
The Billing & Payment Experience – What Patients Shared
1. Cost concerns outweigh COVID-19 as the #1 reason patients skip care.
In Patientco’s most recent survey, more patients cited cost concerns than COVID-19 as the reason they’ve skipped care. Nearly one-third of patients deferred recommended treatment because they were worried about their out-of-pocket costs.
Additionally, concerns were consistent across income levels. Nearly 85% of patients with household incomes greater than $100,000 said they would be less likely to defer care with flexible payment options. For patients making over $175,000 annually, that number stays the same – nearly 85%.
2. Sticker shock from estimates cause nearly 1 in 4 patients to cancel visits.
Although more healthcare providers are providing price estimates upfront, we’ve actually found that sticker shock from estimates causes nearly 1 in 4 patients to cancel visits. In addition, about 18% of patients ask about payment plans or other payment options after receiving an estimate. Meanwhile, in the 2019 survey, nearly all patients, 99%, told us they want upfront information about costs and payment options.
This indicates that patients need more than just price transparency. They also need details around why an estimate is what it is and how they can pay for it. This level of transparency supports a better billing and payment experience. Even if providers meet all the requirements of the price transparency mandate, if they don’t also offer personalized, affordable payment options alongside the estimate, they increase the risk of no-shows. This also increases the likelihood that patients will shop around for another provider with a lower cost.
3. Over half of patients struggle to understand what their insurer covered on their last medical bill.
Confusion is a huge hurdle during the patient billing and payment experience. More than half of patients felt confused when paying for healthcare services because it’s difficult to understand what their health insurance covered and what they owe. These findings were consistent across education levels – even individuals with PhDs had difficulties. It’s not just figuring out what insurance covered that patients struggle to understand. Patients are confused when they receive multiple bills after a single visit, which was the second top cited source of confusion. In last year’s survey, over 40% of patients said they received two or more bills after their last healthcare visit.
An explanation of benefits (EOB) is intended to give patients clarity during the billing and payment experience, but a conventional EOB does not alleviate the confusion. Nearly 2 in 3 patients said that their EOB either did not make sense, took a long time to get, or they didn’t know what to do with the information. Even more surprising, 1 in 10 patients who have insurance do not even know what an EOB is or what to do with one.
What Healthcare Executives Shared
1. 8 in 10 providers will make their telehealth and WFH policies permanent.
Health system administrators are considering which operational changes from the pandemic should be implemented into their operations permanently. Nearly 80% of providers plan to make their telehealth and WFH policies permanent. And over 1 in 5 will keep supporting contactless payments.
2. Nearly half of providers will implement contactless payment options in the next 2 years.
Healthcare providers realize that digital investments will be vital to get patients back in for care after the pandemic. Patients across demographics value the ability to communicate with their provider digitally, especially since COVID-19 fueled adoption of technologies such as telehealth. As a result, providers continue to expand their digital footprint. Contactless payments, real-time chat and presenting HSA/FSA information in the patient portal are the digital tools providers cited most on their 1-2 year roadmaps.
3. Providers are most focused on getting patients back in for care after COVID-19.
After COVID-19, providers’ top priority is getting patients back in the door for care. Nearly two-thirds of providers cited this as a key focus, followed by solving for price transparency, which 51% of providers cited. Reducing costs, addressing talent and resource constraints, and the No Surprises Act tied for third.
A Better Billing and Payment Experience – It’s What the Dr. Ordered
Since the COVID-19 pandemic began, health systems have constantly adapted – from expanding telehealth to swiftly rolling out vaccine programs – in order to keep their communities safe and healthy. Today, we’re hearing from more and more organizations about how they’re going to recover financially and restore patient visit volumes. The findings from Patientco’s 2021 State of the Patient Financial Experience Report suggest that the providers who invest in a better billing and payment experience will be the ones who get patients back in for care sooner.
Barriers to care, which are oftentimes financial barriers, prevent patients and entire communities from achieving better health outcomes. By removing these barriers to offer a positive billing and payment experience, health systems foster trust with patients. Therefore, a modern patient financial engagement platform is one of the best investments a health system can make.
Meet the Author: John W. Mitchell’s job titles have ranged from sailor in the U.S. Navy (broadcast-journalist aboard an aircraft carrier) to COO and CEO for several hospitals. In 2009, HealthLeaders Media named John and his senior executive team the Top Leadership Team in Healthcare for turning around a 90-bed, regional Washington hospital. In 2012, he started his own business, SnowPack Public Relations. John is widely published as a freelance reporter and writer in the hospital, healthcare, and medical sectors. More recently, his projects include writing content on behalf of Patientco. John is also the author of the novel Medical Necessity (four stars on Amazon), and he is a commercially successful landscape and wildlife photographer.