When I was the CEO of a 90-bed rural, regional hospital, our financial success hinged on the ratio of commercially-insured patients to Medicare and Medicaid patients. The closer the ratio of Medicare and Medicaid patients fell to 60%, the better our financial performance that month. Therefore, I made sure my leadership team incorporated strategies to win the trust and loyalty of local, commercially-insured patients. I needed their patronage every year to make the profits to support capital improvements.

However, without the right strategies, financial barriers may prevent commercially-insured patients from seeking care at your heath system. Patientco’s 2021 State of the Patient Financial Experience Report sheds light on what financial barriers many patients face and how to remove them to ensure better financial performance for your health system.

Even Commercially-Insured Patients Face Financial Challenges

Cost concerns are the #1 reason patients skip or defer healthcare treatment.

The top reason commercially-insured patients skip or delay recommended care is concerns about out-pocket costs. Nearly 1 in 3 patients avoided care because they felt anxious about what they owe. What’s more striking? More commercially-insured patients reported skipping care because of cost than lack of insurance. 15% of patients reported skipping care because they didn’t have health insurance.

Nearly half of patients need financial assistance for bills over $500.

For smaller bills, many patients still need help. Over 1 in 5 patients would need financial assistance for a medical bill that exceeds $300. Therefore, even commercially-insured patients whose insurance covers a portion of their bill may still need flexible payment options.

Yet, most healthcare providers do not consider the bill balance amount when assessing a patient’s eligibility for financial assistance. Instead, they typically only use a patient’s income level and/or their insurance status to determine their eligibility for financial assistance. But Patientco’s survey data shows that the bill balance amount impacts whether the patient can afford to pay or not. For example, a commercially-insured patient with a high-deductible health plan may receive a large healthcare bill at the beginning of the year before their deductible has been met. So if their HSA funds have been depleted, or if they had to change jobs like many Americans due to the pandemic, they may not have the funds readily available. We need to consider how to ensure these patients have a way to engage and manage their healthcare expenses. 

Medical bills confuse patients, and conventional EOBs offer little help.

More than half of commercially-insured patients felt confused when paying for healthcare services, as it’s difficult to understand what their insurance covers and what they owe. Even among patients with a PhD or higher, 52% struggle to understand their insurance covered on their last medical bill. What’s more striking? A traditional explanation of benefits (EOB) doesn’t help alleviate the confusion. 2 in 3 patients said their EOB either didn’t make sense or took too long to receive – and they don’t know what to do with the information.

After COVID-19, the #1 focus for providers is getting patients to return for care. 

The pandemic exacerbated the problem of deferred care due to cost concerns, even for commercially-insured patients. But it’s not enough for hospitals to conduct good collection practices to recover this important revenue stream. Now is the time to reinvent the billing and payment experience for patients. Patients want a clear understanding of their out-of-pocket costs and flexible payment options that fit their budget. By delivering the financial experience that today’s patients expect, health systems ensure their patients will no longer be hesitant to receive care.

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.