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Finding patient payment opportunities

Insight Article - March 20, 2018

Patient Engagement

Billing & Collections

Phil Dolan
Healthcare consumerism, high-deductible health plans, patient engagement — when it comes to the revenue cycle, practices are challenged to manage these factors and more.

As high-deductible health plans make patients responsible for larger portions of their healthcare bills, they are starting to pay more attention to the value and quality of the healthcare they receive. In addition, they increasingly expect their healthcare expenses to be on par with what they are accustomed to in other industries. That includes better insight into the cost of care, as well as more convenient payment options.

So where does this leave today’s practices?

To satisfy patients and drive a strong revenue cycle, practices need to look at billing through their patients’ eyes as well as their own. Fortunately, recent surveys from MGMA and Navicure can shed some light on both patient and provider perceptions of the healthcare revenue cycle. Findings can help providers close key gaps — offering insights to improve patient billing, payments and satisfaction.

To provide insight, 761 MGMA members were surveyed in the 2017 Digital Payment Progress Report™ to determine what they think of patient billing and payment options. Some of these findings were then compared with Navicure’s Patient Payment Check-Up™, conducted by HIMSS Analytics in January 2017, to understand differences in attitudes and behaviors between patients and provider organizations. This survey included 1,000 patients and 553 providers.

The results show that while practices are making great strides in patient billing, there’s still opportunity for improvement. In some respects, the surveys reveal striking differences between patient and provider viewpoints. In particular, three broad areas should be examined: patient payment responsibility, transparency and flexibility.

Strong sense of responsibility

Many practices assume patients feel less obligation to pay for their healthcare expenses than they do for other professional services such as child care, accounting or home contracting. Conventional wisdom says that because healthcare can’t be repossessed, paying for it is not a priority for patients.

Yet the surveys indicate otherwise: 86% of respondents feel the same responsibility to pay their healthcare costs as they do with other professional services. Furthermore, while only about one-third of providers say patients pay all or most of their balances when requested at the time of service, nearly two-thirds of patients say they pay in full when asked for at least a portion of their balance.

Knowing patients are as willing to pay their healthcare costs as to have their house painted or their hair cut should empower practices to initiate payment conversations. When it comes to missing or delayed patient payments, the real issue may be less about responsibility and more about transparency.

To that end, practices should consider ways to provide clear, timely communication about what patients owe and why. Providing upfront cost estimates for services and establishing payment plans can help set more manageable payment expectations to improve cash flow and collections.

Desire for cost transparency

Patients who are unclear about what they owe will likely hesitate to make payments. Therefore, greater cost transparency can benefit both patients and practices.

Interestingly, cost estimates appear to offer an opportunity for practices. Of the providers surveyed, 75% say they can provide a cost estimate. However, despite this ability, organizations don’t routinely offer estimates, – perhaps because 76% of patients report never requesting one.

Proactively sharing estimates could go a long way toward improving price transparency, and helping prepare patients to pay their bills faster. It’s worth noting that estimates don’t even have to be exact; the survey findings indicate most patients are comfortable simply knowing ballpark costs. Nearly 20% of patients say any estimate is helpful; another 48% say estimates within 10% to 30% of the actual cost are adequate.

In other words, the inability to provide an actual cost guarantee should not be a barrier for providers.

This is especially important considering future trends. Even though the surveys found most patients don’t currently ask for cost estimates, more than half of the respondents (56%) plan to ask for estimates in the future.

Giving patients advance notice so they can plan to pay their portion of the bill is clearly preferred. It also stands to reason the more aware patients are of the conveniences their providers can offer, the more they will start to ask for those services — especially if they deliver the level of flexibility patients receive in other payments they make.

Convenience drives payment and satisfaction

Understanding a healthcare bill is one thing. Making it easy to pay is another.

Among survey respondents, nearly half of patients say it’s inconvenient to pay their balances. That not only affects a practice’s bottom line, it also impacts overall patient satisfaction.

The good news: the surveys reveal patients are open to faster payment methods, as long as they are also easy and convenient. But what does “easy and convenient” mean?

Defining “easy and convenient” requires insight into patient preferences and some knowledge of an organization’s patient demographics. Here again, the surveys have some useful insights:
  • Providers tend to believe patients are less comfortable than they really are sharing email addresses for electronic communication: Nearly 80% of patients are comfortable or very comfortable doing so.
  • Almost 62% of all patient respondents say they would be willing to set up automated payment plans to pay their balances.
  • Generally, patients under the age of 54 want electronic bill-pay capabilities, with the ability to pay using a debit or credit card. (More than half of all patients — 52% — favor electronic bills to paper bills.)
  • Many patients would feel comfortable paying small balances using a credit card kept on file with the provider.
  • Many older patients still favor writing a check or using their bank’s electronic payment tool to pay balances. If the majority of patients at a practice are older than age 75, digital billing options may be less utilized at this time.
The providers surveyed clearly see the value of digital payment options such as credit card on file (CCoF) and online bill pay to reduce the cost of collections, days in accounts receivable and bad debt/write-offs. What might be surprising is patients’ desire for such options. While only 28% of providers currently store patient credit card information, 78% of patients indicate they would provide their credit card information for one-time payment of balances up to $200 after claim adjudication.

These numbers show that providers might want to consider offering electronic billing and other options to reduce collection costs and increase patient satisfaction. Combined, these methods could result in a more predictable revenue stream for provider organizations, in addition to adding convenience and efficiency for patients.

Understanding shifting revenue cycle trends

Overall, the survey results show MGMA members have a strong pulse on where patient payment options are headed. Still, there are opportunities to improve. Organizations willing and able to embrace digital payment options such as CCoF, automated payment plans and patient cost estimation will be positioned to thrive as healthcare consumerism marches forward.

About the Author

Phil Dolan
Phil Dolan
Senior Vice President of Marketing Waystar - Navicure and ZirMed
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