A Guide to Accelerating Patient Payments Without Increasing Collection Costs
Four years ago, a survey found that 72 percent of providers had named patient financial responsibility and collections as their top healthcare revenue cycle management concerns. Now as hospitals across the country come to grips with the challenges of COVID-19, the strains on medical supplies and personnel may be top of mind concerns, but the ability to collect patient payments also looms large.
Recent analysis by the nonprofit FAIR Health found that patients who are uninsured, under-insured or insured but receive out-of-network care could face bills ranging from $42,486 to $74,310. On top of cost uncertainty, more than 6.6 million Americans filed for unemployment the last week of March. The bottom line: Healthcare organizations looking to overcome collections challenges of the pandemic will need to take a novel approach.
Why Traditional Collections Procedures Fall Short
Several years ago, Becker's Hospital Review reported that with the rise of high deductible health plans, 64 percent of patients left hospital balances unpaid after six months. Another study showed that 73 percent of providers say it takes one month or longer to collect from patients. Acknowledging the growing challenge of collecting patient payments, the article noted, “The traditional 'pay-and-chase' collection model no longer is effective for most healthcare providers.”
Traditional billing and collections processes are labor-intensive and, therefore, costly. Modern Healthcare reports that a study by Harvard and Duke academics found that 25 percent of revenue from an emergency department visit goes toward billing. The post-bill collections processes only further deplete revenues. And turning unpaid accounts over to collections leaves patients vulnerable to harsh tactics while forcing healthcare organizations to give up a percentage of the revenue recovered to the collection agency.
One alternative — suing for the money owed — is also proving problematic. Modern Healthcare cites a Tennessee safety-net hospital that received wide criticism after an investigation found that it had filed more than 8,300 lawsuits against patients, many of whom saw their wages garnished. Similarly, an NPR report from 2019 looked at the damage that lawsuits and wage garnishments have on patients of Mary Washington Healthcare. One day after the story was published, the Virginia-based healthcare providers said it would suspend its practice of suing for unpaid bills while re-evaluating its collections process.
3 Ways to Enhance the Patient Payments Experience While Improving Collections
If traditional strategies for collecting patient payments don’t work, how can healthcare providers accelerate patient payments to keep their cash flows healthy?
1. Make bills more transparent
As we noted in a previous blog, providing a cost estimate when a patient arrives for an appointment helps them anticipate financial responsibility and gives them a more positive view of the billing and payment experience. Becker’s Hospital Review notes that patients are more likely to pay bills when they receive accurate cost information in advance. Transparency also needs to extend to the bills that patients receive. Consolidating costs into a single bill and using simple language — rather than medical or insurance jargon — can reduce confusion, making patients more likely to pay.
2. Personalize your communications
Psychographic segmentation unlocks critical insights into how healthcare consumers approach health and wellness. Each segment — Self Achievers, Balance Seekers, Priority Jugglers, Direction Takers and Willful Endurers — brings different attitudes, beliefs, motivations and communication preferences to the table. This level of understanding allows healthcare organizations to tailor patient communications to prompt action — whether it’s scheduling preventive care, adhering to a post-operative care plan or making patient payments.
3. Automate the collections process and support digital engagement
The PatientBond automated patient engagement platform allows hospitals, urgent care centers and other healthcare organizations to send scheduled payment reminders that align with psychographic segments, helping to motivate responses. Reminders can be sent by a patient's preferred method as well, whether that is email, text message or phone. This feature is particularly important because large segments of the population want to interact with their healthcare providers using their laptop, tablet or smartphone.
Built-in interactive response technology also allows patients to respond in the moment, which can help increase patient payments while freeing up valuable human resources for other high-value tasks. The results can be significant; in one case, the healthcare provider saw a 61 percent increase in patient payments.
The current coronavirus crisis means healthcare providers face unprecedented demand for services — and, as a result, the collections side of business will face similar demand. Putting an efficient, cost-effective patient payments process in place will help hospitals and other medical practices make the best use of strained resources while managing their revenue cycle more proactively. For more patient payment insights, download our case study.