As a hospital administrator, parent, and patient, I’ve learned that a traditional explanation of benefits (EOB) is more confusing than helpful. Nearly every patient has received a document that says, “This is not a bill,” which often leaves them wondering what to do with that information. For most patients, it’s also difficult to decipher which healthcare expenses their health plan covers and what they owe out of pocket.

Survey after survey tells us that health plans and healthcare providers should do better. The good news is now they can, with help from technology. But first, let’s examine the biggest gaps for today’s patients when it comes to understanding their health plan coverage.

The Impact of Unclear Financial Communication from Providers & Health Plans 

According to PolicyGenius, 9 in 10 Americans don’t understand basic insurance terms like deductibles, co-pays, coinsurance, and out-of-pocket maximums. Patientco takes a closer look at these issues in its 2021 State of the Patient Financial Experience Report and reveals the impact of confusing medical bills and unclear EOBs. Among the findings:

More than half of patients have struggled to understand what their health insurance covered and what they owe out-of-pocket after receiving a medical bill. These findings were consistent across all demographics, including education levels. Even patients with a PhD or higher struggle to understand their health plan and what healthcare expenses are covered.

1 in 10 patients who are covered by a health plan do not know what an EOB is.

Nearly two-thirds of patients report that their EOB made little sense, took a long time to get, or they didn’t know what to do with the information.

– 44% of providers agree that helping patients understand their health plan benefits would improve population health goals because of fewer delayed visits.

Conventional Approaches Aren’t Effective

Patient collections takes more than a month for 74% of healthcare providers, according to data from J.P. Morgan. It’s no wonder it takes so long, considering how most providers communicate to patients about their medical bills and health plan benefits.

98% of providers still rely primarily on mailed paper statements to communicate a patient’s financial responsibility. Yet, nearly two-thirds of patients say they prefer to receive digital communication over mailed paper statements or a phone call from their provider.

8 in 10 providers rely on financial counselors to communicate with patients and discuss their financial responsibility. These team members work with patients individually (who often have to wait on hold on the phone) to explain medical bills, to whom patients owe money, and when payments are due.

More than one-third of providers advise patients to call their health plan and compare their medical bill to their EOB. Being redirected to call their health plan is frustrating to patients and adds yet another hurdle before they can get answers to their questions. 

Give Patients Clarity with Interactive, Self-Service Tools

Helping patients understand their healthcare expenses doesn’t have to be painful. All it takes is the right technology, which should check the following boxes: 

– Present relevant EOB details and health plan information side-by-side within the bill pay experience to help patients truly understand their healthcare bills. Patientco’s platform clearly explains medical terminology, such as copay, deductible and out-of-pocket maximum, and how these apply to the healthcare services they received. The platform also uses intuitive visuals that explain how the math works and breaks down the patient’s bill balance. This self-service approach helps patients feel in control. And patients are more likely to pay when they trust their bill is accurate. 

– Embed all relevant information into existing workflows for complete visibility of what the patients see. With interactive, self-service tools such as those mentioned above, patients are less likely to call the business office with questions. However, for patients that prefer to speak with someone, team members need the right information at their fingertips to offer assistance. Patientco integrates EOB data into existing workflows and only the most relevant data is presented. This gives team members full visibility into what the patient sees. Meanwhile, this eliminates the need to manually download EOBs from the health plan’s site.

Don’t Let Confusion Deteriorate Patient Relationships

When patients struggle to understand their medical bills, health plan benefits and how out-of-pocket costs are calculated, trust is broken. Yet, trust is key for providers to build lasting relationships with patients. Fortunately, personalized, interactive patient financial education empowers patients to make sense of all the various claims, EOBs, and bills in a single place while minimizing the workload for hospital business office teams. 

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 a commercially successful landscape and wildlife photographer.