While cost concerns are cited as a major barrier to care for patients, there is another, lesser-known barrier to care: confusion. When patients struggle to understand their medical bills, explanation of benefits and how out-of-pocket costs are calculated, trust is broken. Yet, trust is key for providers to build lasting relationships with patients. 

Many patients lack clarity when it comes to their healthcare expenses, but where are the biggest gaps in patient financial literacy today?

The Current State of Patient Financial Literacy 

What do I owe? 

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.  

Why am I getting so many bills? 

Over 1 in 4 patients has been confused because they received too many bills for one visit. When patients receive more than one bill after a healthcare visit, they often feel concerned about being charged multiple times for the same service. 

What do these terms mean?

9 in 10 Americans don’t understand basic insurance terms like deductibles, co-pays, coinsurance, and out-of-pocket maximums.

What’s an explanation of benefits? What do I do with it? 

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

Implications for Health Outcomes

When patients don’t understand basic terminology and concepts that impact them, it deteriorates trust between them and their providers. Patients may become hesitant to seek care and more likely to defer treatment. As a result, patients may avoid care until their condition becomes unmanageable and requires more complex, costly treatment. This is a problem for both patients and health systems.

Even when patients do pursue treatment, if they don’t have clarity about their insurance benefits and their out-of-pocket costs, they could inadvertently end up seeing a higher cost provider. Despite the price transparency rule taking effect this year, patients aren’t always using the price transparency tools in a meaningful way. A recent Health Affairs article showed that even after a marketing campaign increased the number of patients using a price transparency tool, many patients still picked more costly doctors. This can worsen financial stress for some patients.  

Providers Aren’t Happy with the Status Quo Either

Overwhelmingly, healthcare providers recognize there are significant benefits to helping patients understand their financial responsibilities and why they owe what they owe.  

Less Confusion, More Trust 

Nearly 9 in 10 providers believe that helping patients understand their health insurance benefits would reduce calls from confused patients and improve patient trust. 

Better Population Health

44% of providers agree that improved patient financial literacy would improve population health goals because of fewer delayed visits.

Increased Payments 

Nearly two-thirds of providers believe that improving patient financial literacy would make patients more likely to pay their healthcare bills.

Conventional Strategies Won’t Work

While there are clear benefits to improving patient financial literacy, tackling this issue is often time-consuming and resource-intensive. 

It’s Resource-Intensive 

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. As a result, educating patients about their healthcare expenses is a highly manual and inefficient process. 

Patients Feel Frustrated

More than one-third of providers advise patients to call their insurer and compare their medical bill to their explanation of benefits. This is because resolving patient inquiries typically requires access to multiple sources of information, such as remit files, medical records and insurance cards, which are not easily reconciled. However, being redirected to call their insurer is frustrating to patients, as this adds yet another hurdle before they can get their questions answered. 

Redefining What it Takes to Improve Patient Financial Literacy 

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

☑Provide the right information at the right time.

Present relevant EOB details and insurance information side-by-side within the bill pay experience to help patients truly understand their healthcare bills. By providing the right information at the right time, patients can more easily comprehend their health benefits, what their insurer contributed and what their out-of-pocket cost is. The patient’s EOB information should be available not only in the online patient portal, it should also be available on billing statements, whether it’s a paper bill or electronic bill, which Patientco supports.

☑Make it easy to understand.

Help patients understand confusing medical terminology, such as copay, deductible and out-of-pocket maximum, and how these apply to the healthcare services they received. In other words, if a patient has met 75% of their $1,000 deductible, how does that relate to the bill for these services? Many patients struggle to understand what determines their bill balance and therefore may lack confidence in the accuracy of their bill. Patientco offers clear definitions of medical terms and 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. 

☑Give clear next steps. 

Explain how patients can take action to ensure they feel understood and in control. Give clear instructions on who to contact and how, if needed. For example, if a claim was denied by insurance, Patientco can provide patients with that visibility and instruct them on next steps, such as uploading a new insurance card. 

☑Personalize what you present to the patient. 

Some procedures and charges are more complex than others, which means certain patients may need more help understanding their bill. Patientco is able to predict which patients are more likely to be confused based on what they are being charged for. With this insight, we can further personalize how we present the explanation of benefits to the patient. This helps prevent patients from having to call their provider or insurer with questions.     

☑Give your team more visibility and filter out unneeded 835 “noise.”

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 in order to offer assistance. Patientco integrates EOB data into existing workflows, presents the most relevant data, and filters out any 835 data that is not useful. This gives team members full visibility into what the patient sees without having to manually download EOBs from the health insurer’s site. As a result, the business office can easily review all patient communications and statements, as well as balance updates and insurance data in one place.

Give Patients the Clarity They Crave

The relationship with the patients doesn’t have to deteriorate when the patient enters the realm of the business office. The revenue cycle team makes just as significant a contribution to patient loyalty as the nurse on the floor.  As The Joint Commission noted:

“Addressing health literacy issues is not the sole burden of those providing health care services. There are implications as well for health care policy makers, purchasers and payers, regulatory bodies, and health care consumers themselves.”

Team members in the business office have more productive work to do than deal with upset and angry patients. Patients have better things to do than wait on hold to speak to a financial counselor or their health insurer. It’s in everyone’s best interests to improve patient financial literacy in a way that’s scalable, intuitive, interactive and personalized. 

Want to learn how Patientco’s EOB integration takes our Best in KLAS engagement platform to the next level? Schedule a brief consultation with one of Patientco’s payment specialists.