New consumer-driven payment models are rapidly transforming the healthcare landscape, compelling providers to adopt new business processes. These models rely on successful strategies to engage the patient at the time of service.
The patient experience and the revenue cycle both begin at scheduling. This event sets in motion a series of processes that begin the flow (or leakage) of funds to the healthcare organization.
Many leading healthcare providers identify and collect patient-responsible balances prior to service and/or at the time of service, significantly increasing the likelihood of timely payment for services performed.
It’s important to recognize the patient’s approach to their healthcare transaction. Both before service and at the time of service, patients regard themselves as consumers whose primary focus is pursuing healing—in an acute situation --or significant improvement in their health status in a chronic condition.
Once the procedure and/or hospital stay is complete, during account follow-up and collections, that patient becomes a debtor. Both the provider and the patient experience a shift in priorities at this point.
While much attention has been given to the patient’s clinical experience at the time of service, providers, historically have focused less on the patient’s experience following their episode of care.
In an effort to strive to improve the patients’ experience in paying for their services, providers should empower patients with more options for payment, evaluate touchpoints for consistency in their communications with patients, and understand and embrace patient diversity
Empower patients with more payment options. As new technologies continue to influence patient behavior, patient communications preferences are changing. Patients expect convenience in their payment options similar to options available in retail industries. Novel billing and payment channels that provide more flexible payment options allow patients to continue to feel in control of their experience and help provide continuity as they shift roles from service recipient to debtor. Payment methods in healthcare have not evolved at all and it seems feasible that more payment options will become available through technology such as block chain,online payments and mobile payments.
Strategize and proactively monitor patient touchpoints for consistency in communications. Patients can become easily frustrated when they are inundated with phone calls, emails, texts, and mailed communications that are uncoordinated (e.g., receiving an unexpected bill in the mail after paying the balance online several weeks prior). Patients also expect that their financial experience from one encounter to another will be similar and that communication would be consistent and simplified.
Improving the consistency of communications during every time the organization interacts with the patient will help patients know what to expect and to become less apprehensive about the payment experience.
Understand that patients have diverse preferences when it comes to billing and payment. Some patients might prefer to pay for their services by mail, online, or on the phone. Providers should take a data-driven approach to exploring their service area demographics and considering patients’ historical, behavioral, and preferential factors and then act accordingly. This means that there should not be a one-size-fits-all approach, rather organizations should use some form of empirical information to determine what approach works best.
With the evolution of high-deductible health plans and health savings accounts, consumers are now responsible for a larger portion of their healthcare expenditures. Currently 29% of covered workers are enrolled in a high-deductible health plan/healthcare reimbursement account (HDHP/HRA) or healthcare savings account (HSA-Qualified HDHP). This shift can lead to a rise in bad debt.
According to a survey conducted by the Healthcare Financial Management Association (HFMA) on self-pay and the benefits of prospective patient engagement, hospitals have experienced a 10% increase in self-pay dollars in the past five years. Of those surveyed, 35% do not offer pre-service or point of service collections for inpatient services and 25% do not have time of service collections in the emergency department. However, point of service collections is one of the top priorities for financial executives given the increased risk of write offs.
Creative solutions to identify and collect at time of service can be achieved by:
Technology can enable organizations to more accurately identify patient-responsible balances and allow patients access to new technologies and processes to pay their portion of their bill. Like banking, airline and other industries that have adopted self-service technologies, health systems can enable the consumer to register, view their visit, check-in and pay balances due through automated solutions. Solutions may include online scheduling, online payment portals, registration kiosks, and mobile applications that provide appointment and payment reminders. These solutions can be especially useful for unexpected arrivals and can speed up the registration process.
Historically, health systems are not comfortable with asking patients for a payment, particularly at the time of service. Engaging patients at the beginning of the interaction changes the culture of an organization. When done correctly, the results are positive for both the patient and the provider.
Educating, enabling and engaging employees can overcome the discomfort of asking a patient for money. Time of service engagement is an opportunity to educate the patient on what their obligation is likely to be and the benefits of paying upfront. Providing incentives for customer-facing employees can help alleviate their reluctance to ask for money. Engaging staff in role play exercises, providing sample talking scripts and proper training can help the most apprehensive employee to further discussions with the patient at the time of service.
Billing the patient for their responsible balances after the fact is time consuming, costly and yields a low return. As these accounts age, the cost to collect increases and the likelihood for payment decreases, significantly reducing the value of that account. Patient collections involves printing, mailing, human labor and in some instances 3rd party vendors to collect, making efforts to collect these balances cumbersome and costly. Therefore, adopting an innovative, technology driven strategy at the time of service can significantly reduce cost, improve efficiency and increase the realization of revenue on patient balance accounts.
1. 2016 Patient Financial Experience Report. InfoTrends and Apex Revenue Technologies.
2. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2016, PNC’s Treasury Solutions Group.
The article you read was prepared for general information purposes only and is not intended as legal, tax or accounting advice or as recommendations to engage in any specific transaction, including with respect to any securities of PNC, and do not purport to be comprehensive. Under no circumstances should any information contained in this article be used or considered as an offer or commitment, or a solicitation of an offer or commitment, to participate in any particular transaction or strategy. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Neither PNC Bank nor any other subsidiary of The PNC Financial Services Group, Inc. will be responsible for any consequences of reliance upon any opinion or statement contained here, or any omission. The opinions expressed in this article are not necessarily the opinions of PNC Bank or any of its affiliates, directors, officers or employees.
PNC is a registered mark of The PNC Financial Services Group, Inc. (“PNC”).
Read a summary of privacy rights for California residents which outlines the types of information we collect, and how and why we use that information.