The Rise of Consumerism in Healthcare

Four ways hospitals can leverage analytics to transform patient financial engagement, increase patient satisfaction, and improve the bottom line

Increased regulations and changing reimbursement models mean today’s providers face far greater revenue challenges. A larger portion of their revenues now comes directly from patients, and that number is expected to increase by as much as 50 percent by 2019.1 Insured patient responsibility has grown to nearly 27 percent for outpatients and more than 12 percent for inpatients.2 Deductibles now average more than $2,000 a year, a 67 percent increase since 2010 and 255 percent since 2006.3

More money coming from the patient’s pocket forces every healthcare enterprise to embrace new operational realities. Whereas a handful of patients historically might have been interested in what their care could mean in terms of financial obligations, now it is virtually every patient and it is both an interest in top-line service price and the patient’s specific share. Questions start well before service is delivered, often utilized as part of a shopping effort to select the treatment provider. Responding to these challenges is not easy, given the complexity of contracts and the inherent uncertainty that is often present in a healthcare treatment.

While the trend has been long underway, many hospitals have been slow to adopt key tools to deliver the pricing and billing transparency to patients across the care relationship. According to a 2016 Black Book Market Research survey of hospitals and independent physicians, 90 percent claim they are not yet positioned for the shift to increased patient payment responsibility.4

Fortunately, there are proven solutions in the market to close the process gaps. At their core are routines that leverage analytics to engage and support patients in the extended relationship. Four key themes have emerged as central to deploying better patient-centric solutions.

1. Provide better patient guidance through better understanding

Hospitals are deeply committed to community service and care to all. Yet they cannot remain fiscally viable in this new healthcare ecosystem without the ability to assess patients’ ability to pay. As the old saying goes, “no margin, no mission.”

Capturing socio-demographic and economic behavior data in the context of hospital-specific payment policies is a first step in sorting patients to ensure fair treatment and consideration for all patients in need. Providers can leverage this data to automate workflows, enabling staff to work by exception and focus the right type of resource on the right patient. Financial counselors spend more time on patients who can get the most benefit from possible programs. Patients with financial responsibility and not qualified for assistance plans can be segmented and prioritized for more traditional payment resources.

Gathering accurate patient data using predictive technologies also simplifies and expedites the financial clearance process, making it less stressful for the patient. Staff can target their conversation to specific open items, perhaps a confirmation of income or coverage, and be more supportive to the patient as they work through the financial implications. The engagement can also begin well before the patient arrives on site, thereby further reducing stress around the clinical treatment.

The financial assessment process should begin before patients arrive, and should include:

  • Verifying patient identity;
  • Verifying any existing insurance coverage and establishing the estimated amount the patient may owe;
  • For those without coverage, evaluate possible eligibility for government mean-tested programs like Medicaid; and
  • For those with larger balances, even those with insurance, test for eligibility under the hospital charity policies.

2. Make it easier for patients to pay by providing multiple personalized options

The main reason patients cite for not paying their bills is that they lack financing options.5 Yet for those that do have payment plans, 40 percent go into default.6 Forcing patients into one-size-fits-all payment plans decreases the likelihood hospitals will be paid in full. Understanding a patient’s unique financial position allows hospitals to identify appropriate payment options. By offering attractive financial plans, patients are more inclined to return for future healthcare needs, leading to increased revenue for the hospital and enhanced loyalty in the patient-base.

Providing patients with financial assistance helps alleviate their stress and improves patient satisfaction. And satisfied patients are 74 percent more likely to pay their bills in full7 as well as recommend the provider to others. Financial payment solutions should include:

  • Automated discounts and incentives based on balances
  • Credit card processing and pre-authorization routines;
  • Tiered payment plans, with more than a single option in the ready;
  • No-interest and no-risk loans; and,
  • External lending referrals.

A word of caution on financial options pre-service and the potential for inadvertently triggering a credit event in the context of a lender:  Critically, resolution solutions need to be policy driven and not a reaction to a patient’s specific credit or financial situation which might be construed as denying credit to a patient under fair lending regulations.

3. Focus on clear, comprehensive and understandable communications

Hospitals that guide patients through the financial planning process are viewed as advocates and trusted advisors. In a single clinical treatment, there is certain to be a substantial amount of paper, to-do’s, and checklists; the volume becomes quickly overwhelming to patients and their support network.

From the patient financial perspective, communications should build as the patient event builds. Make sure the details of any balance due and financial resolution are documented in language that the layperson understands.  It shouldn’t take a payor expert to understand the bill and expected payment obligation.

Central to a positive process is clarity about:

  • Outstanding balance and payment history
  • Reconciliation of any initial fee estimate with final patient responsibility
  • List of possible financial assistance
  • Proposed payment arrangements tailored for the individual
  • Agreement on terms and patient acceptance

4. Engage using multiple mediums and over time to be accessible but not burdensome

Today’s consumer expects the same options in paying their healthcare bills as they do their other bills, including the option to pay online.8   All of these enable patients to engage when they want and result in lower operating costs for the provider.

Patient portals are one new technology to deliver this patient experience. Portals can be simple to use and include self-service tools that allow patients to explore bill payment options best for them. Giving patients more control relieves the burden on the business office, and enables better utilization of scarce resources. Other digital communications tools like interactive text systems and emails can complement a new portal as well as traditional patient call centers.

The full suite of digital tools should include:

  • Digital communications
    • Email and SMS/Text
    • Statements that mirror the paper version
    • Balance notifications
    • Reminders of recurring payments or bank withdrawals
  • Automated phone call reminders and options to speak to an expert
  • Patient Portal
    • Account details
    • Balance due
    • Financial assistance options
    • Self-service maintenance of financial plans
    • Online payment history and receipts

Turn the patient consumerism challenge into an opportunity

The rise of consumerism in healthcare adds yet another level of complexity to an already challenged revenue cycle. With ever-changing rules regarding patient benefits and payor reimbursement, providers need to find a way to successfully work around the uncertainty.

By leveraging analytics, hospitals can create exception-based workflows, increase staff efficiencies, reduce the cost of collections, and improve the patient experience. In short, holding on to yesterday’s revenue cycle processes is not only unsustainable; it threatens the very foundation of a hospital’s financial viability for the long run.

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