It’s no secret in the healthcare industry that patients are quickly becoming one of the largest “payers” providers are collecting payments from. According to the March 2017 HealthLeaders Media article, “The Rise of the Third Payer: Disrupting Patient Payment Culture,” nearly 1 in every 3 workers with employer-sponsored health insurance were enrolled in high deductible health plans (HDHPs) in 2016, up from 1 in 20 a decade earlier. The Kaiser Family Foundation learned that 2016 also was the first year that “half (51%) of all covered workers face deductibles of at least $1,000 annually for single coverage.”
Meanwhile, a January 2017 study issued by the Consumer Financial Protection Bureau called “Consumer Experiences with Debt Collection: Findings from the CFPB’s Survey of Consumer Views on Debt” found that of 1,000 healthcare consumers polled, 28% said they weren’t confident bills were accurate; 31% did not find bills simple to pay; 42% found medical bills unaffordable, and 47% did not understand cost beforehand. What’s more, a 2016 study by Connance found that patients who were not satisfied with their healthcare provider’s billing process were less likely to pay their medical bills in full (33 percent) than patients who were satisfied (74 percent).
So how do you address the large patient balances that are filling up your accounts receivable while also acknowledging the increased patient desire for the same high levels of customer service present in other service industries? In part one of this three-part series, we’ll discuss ways to improve your patient collections while also improving your relationship to your patients by making bill payment easy.
Make Bill Paying Easy
Interestingly, the majority of insured consumers (74 percent) say they are able and willing to pay their out-of-pocket medical expenses up to $1,000 per year, and as many as 90 percent would pay for medical expenses up to $500 per year. So, why don’t they? A 2009 McKinsey Quarterly survey found that “a lack of options for payment plans, poor timing of bills, and difficulties coping with confusing statements or policies were major barriers to paying.”
But patient billing isn’t brain surgery. Save that for the operating suite. Instead, make paying bills as easy as possible for patients right from the beginning.
Start by providing easy-to-understand and transparent cost estimates prior to the service, and discuss payment options at the same time. According to that same 2009 McKinsey Quarterly survey, 52 percent of consumers said they would be willing to pay from $200 to $500 or more by credit or debit card when they visit a physician if an estimate was provided at the point of care.
After the service has been provided, send statements that include everyday-language—not just a bunch of alphanumeric codes—and be sure the amount owed and the due date is clearly listed. And for patients who prefer it, send statements in eFormats, with links to your payment portal or other online payment options.
Still collecting patient payments through mailed statements and payments? You’re not alone. According to BillingTree’s 2016 HealthCare Operations and Technology Survey, the vast majority of healthcare providers still collect payments through the mail (93%) or through an agent over the phone (87%). Web portals came in third at 66%. Interactive Voice Response (IVR) systems were used only 7% of the time, and mobile and text payments, only 13% of the time.
But patients want these more options to make bill paying convenient to their busy lives. Also, be sure patients know when they do have other choices. Post your financial policies clearly in your office and on your website, including all the formats in which payments can be collected.
Proactive Payment Plans
Finally offer payment plans, too, with options for recurring automatic payments so that you receive payments each month with no additional intervention. But be sure to prompt patients to pay the bill off as quickly as possible. One Georgia-based family practice realized that when they suggested a $25 monthly payment, nearly every patient took it, regardless of whether they could have paid more. Instead, they began asking patients to pay 10% of the total bill each month, with the goal of having the bill paid off within a year. GLA’s Time Payment Plan offers payment schedules ranging from two to thirty-six months, depending on the amount due and the patient's financial situation.
Look for Part 2 of this series next week, when we’ll discuss the importance of collecting payments at the earliest point possible in the revenue cycle.