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Medical Group Management Association

Improving patient financial communications

Insight Article - August 10, 2018

Financial Management

Patient Engagement

Matthew Hawkins MBA

As patient deductibles, copays and co-insurance continue to rise, it is imperative for healthcare organizations to enhance the way they communicate with patients about their financial obligations. Not only is this the right thing to do to make sure individuals are well informed about what they owe, but it is also important because the more patients understand their bills, the more likely they are to pay them.
 
There are several ways to increase transparency around patient financial interactions. The following sections take a brief look at some of the more impactful options.
 
Provide upfront cost estimates
According to a recent survey of healthcare financial leaders and patients, conducted by HIMSS Analytics and Waystar, proactively offering an estimate of care costs can go a long way in providing clarity to patients and enriching the customer experience. The survey notes 86% of patients who receive cost estimates indicate they understand their payment responsibility and 46% state they would be more likely to pay more of their bill upfront at the time of service. These estimates also improve patients’ perceptions of the organization. Nearly 70% of patients who receive a cost estimate say they would be more likely to return for care in the future or recommend the practice to a friend.
 
Although practices can deliver cost estimates, they often don’t take advantage of this opportunity. Despite almost 90% of providers stating they could supply cost estimates to patients, only 18% of patients received one without asking. Practices should consider implementing processes that ensure this critical information exchange happens more consistently.
 
Equip staff to be a resource for patients
In addition to offering estimates, organizations must be able to explain what the estimates mean and how much the patient owes at the time of service. When practices use approachable cost estimation technology that clearly communicates information, it makes it easier for staff to educate patients. Patients can see at-a-glance how much they owe and how the different costs break out, and the cost estimate does not have to be perfect. According to the survey, most patients are comfortable with estimates that fall within 10% of the actual cost.
 
Practices must also train staff to engage patients in financial conversations, ensuring employees can respond to patient queries and provide more clarity about financial obligations, if necessary. Organizations should also teach staff how to recognize the signs that a patient has concerns about making payments and could benefit from a payment plan. Staff can then suggest spreading the payment over time, respecting the patient’s desire to pay and making it easier for them to do so.
 
Make payment convenient
As part of a commitment to transparency, practices should consider offering a variety of options to ease the payment process. More than one-third of patients indicate paying for healthcare is inconvenient, regardless of whether it’s affordable. This is an area where healthcare organizations could simplify. For example, most patients would prefer electronic communications about their bills and yet overwhelmingly healthcare providers still work with paper. Patients would also opt to use debit or credit cards to pay, whether payment is made on the provider’s website, patient portal, via a credit card kept on file (CCOF) or using an automated payment plan. When providers present different options, patients can take advantage of whatever method works best for them. Not only does this prompt payment, but it also communicates the practice is meeting consumer needs.
 
Reinforce that the practice is here to help
Organizations should seize every opportunity to let patients know the practice is ready to assist them in meeting their obligations, informing patients that cost estimates, payment plans, convenient payment options and other financial information are available upon request. This communication could take the form of signage within the practice, banners on the practice website, or articles in organization newsletters. The more open a practice is about payment, the more likely patients are to pay, increasing revenue and decreasing the chances of bad debt. Moreover, robust communication can elevate patients’ perceptions of a practice, preserving loyalty and driving referrals.   
 
Looking ahead, it appears the trend of rising patient responsibility will only continue. If a practice commits to enhancing its communication with patients around financial responsibilities, it will cultivate stronger patient relationships, improve satisfaction and drive revenue into the organization. This helps practices achieve their goals of delivering greater value throughout the care experience.

Learn more
If you are interested in learning more about ways to increase transparency around patient financial interactions, you can attend the session, "Addressing the Evolving Billing Needs of Your Patients" at MGMA 18 | The Annual Conference in Boston. The session will be led by Ken Bradley, vice president, strategic planning, Waystar, and Brendan FitzGerald, director, research, HIMSS Analytics. The session will take place on Monday, Oct. 1 at 1:30 p.m.
Get the details and register.

About the Author

Matthew Hawkins MBA
CEO Waystar

Matthew J. Hawkins is a proven software executive. Matt has a passion for healthcare and technology-enabled businesses. Matt received an MBA from Harvard Business School and a Bachelor’s Degree with University Honors from Brigham Young University. He is also deeply committed to volunteer service, including recent volunteer board positions with the Florida divisions of both the American Cancer Society and the American Heart Association.

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