By Bird Blitch, Chief Executive Officer
The following article appeared in Executive Insight, you can access the original here.
With the healthcare industry shifting towards value-based care models, many providers are focusing their time on clinically engaging patients to lower costs and better care outcomes. However, providers often overlook the significance of financially engaging patients to improve the patient experience and boost the bottom line. The growing popularity of high-deductible health plans (HDHPs) that offer less expensive premiums than traditional plans, but require insured patients to pay thousands of dollars in out-of-pocket costs, is leaving more hospitals stuck with unpaid bills.
According to the Kaiser Family Foundation, in 2012 about one-third of Americans were enrolled in a plan with a deductible of $1,000 or more, and 14 percent were enrolled in a plan with a deductible of $2,000 or more. While in theory high-deductible plans were thought to engage consumers in more healthcare decision-making, the reality is that they lead people to forego necessary treatment or not fully understand the extent of their responsibility until they receive the bill. As a result, hospitals and health systems are facing billions of dollars in bad debt that threatens their ability to keep the doors open.
While providers have spent a great deal of time and effort on finding ways to clinically engage patients, far less time and effort has been spent trying to understand the value of and ways to financially engage them. Yet proactive activities throughout the patient revenue cycle can lead to positive outcomes for both. Healthcare providers can employ the following three strategies to convert patients from passive bystanders to active participants in managing their financial health.
Educate the Patient on their Financial Responsibility
One of the main tenets of patient engagement is to define the patient’s role in their healthcare and educate them on the best course of action from the choices available. Providers know that the more patients understand about their conditions, what treatment is needed (and why) and the consequences of not following instructions, the more likely it is that they will actively participate in their care, adhere to treatment plans and make healthy lifestyle decisions. The same can be said for patient financial engagement.
As patients become responsible for a larger portion of their healthcare bills, it becomes increasingly important that they understand their expected out-of-pocket costs and resolve how they will handle their medical expenses before they incur the costs of services. Explaining the process and payment options on the front end not only alleviates the back-end burden on accounts receivable staff, but also improves consistency, standardization and patient satisfaction. Before care begins, providers should do the following:
- Communicate patient responsibility for pre-scheduled, high-dollar value procedures and balances on their account
- Capture credit card information to process co-pays and patient responsibility after adjudication
- Create a payment plan for patients with large amounts due
Providers should be upfront about treatment costs and patient responsibility in order to help shape patients’ experience of care delivery. When patients are angry, upset or merely confused about their bills, providers can wind up paying the price in the form of negative satisfaction surveys, poor verbal and online reviews, and even bad debt and lost business.
Ease Transitions with a Simplified Patient Statement
Easing transitions is about communicating the right information at the right time in a manner the patient can understand. For example, patients who are provided educational materials written in plain language about their clinical care are better able to understand what is expected of them when they go home and are often more satisfied, engaged and have better outcomes.
In the same way, simplifying patient billing-such as providing a unified statement that combines treatment across providers and translates treatment codes into plain language-can make it easier for patients to understand the services they received and increase the likelihood of prompt payment. Also, including financial information that is outside the episode of care-for instance, how much of the patient’s deductible has been met, or details about co-pays and insurance payments-goes a long way toward helping patients better understand their financial responsibility. Having all this information available online and accessible via mobile devices, including monthly payment reminders via email, is yet another way to stay in continuous communication with patients after the episode of care.
Grant Control through Payment Options
Patients expect and need to be engaged on their own terms-in ways that allow them to maintain a sense of control over their choices, experiences and expectations. Today’s consumer environment is driving these expectations within the healthcare industry as well. This can be accomplished, for example, by providing the kind of information patients want in the format they prefer, such as via patient portals, interactive tools, email reminders and texts.
Similarly, patient-centric financial communication means offering flexible and automated payment options. Flexibility makes patients feel like a provider is on their side, helping them meet their financial obligations in a compassionate manner and within an adaptable timeframe. Additionally, having multiple payment options that allow patients to pay by cash, check, payment plan, or debit/credit card-in the office, online, over the phone or by mail-paves the way for prompt and full payment. In fact, by employing a flexible and automated patient revenue cycle management solution, one such healthcare organization increased total patient dollars by 32 percent. Ultimately, giving patients the choice over when and how to pay helps to reduce financial anxiety and makes the patient feel more engaged in the process and confident in the overall quality of care.
A Golden Opportunity
With average out-of-pocket costs for healthcare rapidly increasing, now is an opportune time to implement a thoughtful strategy for improving patient financial engagement. Providers can improve patient revenue by using the techniques and technologies that have proven to motivate patients to participate in their own healthcare. With an effective patient financial engagement system-one that reaches out to patients, informs and educates them in plain language about their services and responsibility, and empowers them with flexible payment options-patients can better manage their financial expenses and providers can improve their bottom line without burdening the business office.