Patients are truly becoming the new payers as many health plans on the market require patients to assume greater financial responsibility for their choices. However, as patients bear an increasing burden of medical debt, practices are seeing significant financial challenges across the board when it comes to communicating and collecting on that debt.
Black Book conducted survey polls in the second and third quarters of 2017 with patients and providers. The patient surveys were focused on patient responsibility for medical costs, while the 1,595 physician practices, 202 hospitals and 49 health systems surveyed reported the impact of collections on their organizations.
From these surveys, it was confirmed that high cost-sharing plans put practices in an uncomfortable position; because they need to collect outstanding patient balances more aggressively, this often forces the staff, and even the doctor, to take on the role of “bad guy.” Since 2015, patients experienced a 29.4 percent increase in deductible and out-of-pocket maximum costs on average. This year, the typical healthcare consumer will be responsible for $1,890 in deductible payments and $4,400 in out-of-pocket costs–this translates to 14 percent of the median wage for workers in the United States.
So, what can providers do to ease the burden on patients whose propensity to pay may vary while still collecting the millions of dollars owed and currently outstanding?
Rethink Traditional Collections
The old way of conducting revenue cycle management in healthcare has been long gone for over a decade, and medical practices must continually embrace new processes and technologies that provide more financing options, engage patients early, analyze consumers’ propensity to pay, managing expectations and offer genuine cost transparency.
Many providers reported to Black Book millions of dollars in unpaid medical pills, of which forced a shift toward new processes and technologies to recover the monies owed. Due to the increased patient responsibility for the final bill from a doctor’s visit or hospital stay, attention must be placed on establishing funding mechanisms to benefit not only the provider, but also the consumer.
Look at Tech Solutions
As providers look for innovative, patient-friendly payment solutions that meet consumer preferences, the ability to enable fast and secure transaction will be key. Within this demand and as most provider respondents plan to implement more retail-like technology solutions and practices, there are four key trends within tech solutions for patient billing that deserve attention.
- Practices move billing and collections online
In the first half of 2017, Black Book reports that 63 percent of medical bills were paid online. Furthermore, an overwhelming 95 percent of consumers polled said they would pay online for medical services if their providers had that option.
- Mobile technology reshapes the patient payment process
A majority of patients reported that mobile pay and cell phone billing alerts improved their satisfaction with a provider. Furthermore, 89 percent of surveyed financial administrators expect most healthcare payments will be made on phones or mobile devices by the end of 2018. However, just 20 percent of facilities are currently ready for electronic payments.
- Enabling price transparency online ranks at the top of practice improvements
Among the top five improvements providers could make to increase patient satisfaction with their billing process are online patient payment estimators, plan administration and on-demand instructions—all factors that improve price transparency to consumers prior to and post patient care. Additionally, options for spouses, family members, and others to pay medical bills without accessing the patient’s medical records were an important factor in improving consumer satisfaction with the billing process. A majority of consumers are even looking to make online payments without having to register.
- Small practices face the biggest hurdles adopting new technology.
The majority of healthcare providers surveyed reported traditional collection solutions are negatively impacting their profit margins, However, larger hospitals and physician groups have been able to more easily invest in technology to get rid of manual processes. Small practices reported the greatest number of slow payments on high-deductible plans, of which was the top challenge for 83 percent of the practices surveyed. The number two challenge involved difficulties faced by staff face in communicating patient accountability.
Dealing with the rising cost of care and the increasing financial burden placed on the shoulders of patients has long been a part of the modern healthcare economy. Our healthcare industry brief, Priorities for Providers: Understanding How Healthcare Megatrends Impact Your Medical Practice, outlines four major industry shifts affecting the business and practice of medicine and include advice on where physicians and practice staff should focus their attentions in the future.