Hospitals and health systems are collecting a greater portion of healthcare bills from patients today than in the past; patients have larger deductibles than ever before, and individuals with health savings accounts pay close attention to their costs.
As a result, hospitals need a patient-centric revenue cycle infrastructure. Stuart Hanson, senior vice president and general manager of consumer payment solutions at Change Healthcare, discusses how to transform a traditional revenue stream into a patient-centric revenue cycle that will improve collections as well as patient satisfaction.
Mr. Hanson will also speak on the topic at Becker's Hospital Review 3rd Annual Health IT + Revenue Cycle Conference, Sept. 21 to 23 in Chicago. Click here to learn more.
Question: What are the biggest challenges healthcare providers face today managing patient collections?
Stuart Hanson: What we've seen over the past several years is a focus on high deductible health plans. The real big problem is that revenue cycle systems and processes were designed to optimize commercial claims and manage denials; those systems were built without the customers in mind. In general, providers have experienced a massive shift to strategically manage consumer collections, which requires them to retool their systems, processes, and communication with patients. The specific challenges providers encounter include:
1. The cost of collecting from consumers is going through the roof: As more money shifts to consumer collections as opposed to payer collections, it drives major erosion in revenue cycle performance overall due to obtaining multiple statements and answering questions about patient bills. It can cost a provider about 10 percent to 15 percent of a total bill to collect from the consumer.
2. Customer frustration: Customers have high deductible plans, but they don't know what to expect and they don't expect a bill as high as the one they receive. Consumers feel like they are being overbilled, and we know when customers get aggravated they drag out payment and are less likely to recommend a provider to friends and colleagues. That's negative for the provider office.
3. Compliance with technology and security standards for processing payments: Patients may pay with chip cards as opposed to swipe cards, and that's something providers shouldn't do. They need to make sure card information is secure any time they process a transaction.
Q: How can providers create a consumer-centric revenue cycle? What are the key steps and workflow changes they should implement?
SH: The consumer-centric model applies to three categories;
1. The bill should be clear, correct and easy to understand: I want transparent billing communications that come before I receive care. If a test isn't covered by my insurance, I expect the physician's office to tell me it's not covered but that they recommend it and how much it will cost. That's clear, transparent communication and makes financial responsibility the No. 1 priority.
2. There should be frictionless payment capability: I want to pay bills on my mobile phone at a Little League game or on the computer at night. It should be easy to make a payment and I want a site where I can use my health savings account or credit card to pay.
3. Providers should get more consumer feedback with regards to billing: Not every provider needs to do surveys of patients, but there is a lot of good research out there in terms of what consumers expect and it's straightforward in the expectation of where there are gaps and areas for improvement.
Q: What tools are most effective for healthcare organizations to review and update their revenue-cycle process to become more patient-centric?
SH: I think it's most helpful for providers to leverage and invest in KLAS examples and tools out there existing in the market versus trying to build and manage their IT solution in-house. There are a lot of good tools out there built on consumer research to deliver clear and transparent information. There are very few providers that would claim their core competency is building technology tools or payment for consumers.
Providers also need to personalize their approach. I don't like to get paper bills, but my mom loves them and hates getting bills over email. Providers need to adapt and personalize communications to different consumers. I'll be responsive to a text with an embedded link to pay the bill online in eight minutes, but might take 18 days to respond to a paper bill.
We rolled out a digital campaign for one of our anesthesia clients with the digital payment option. The open and payment rate was three times higher than the response rate to paper bills. It's relatively easy to implement if you partner with the right company that has those tools.
Aetna is also working on a creative solution to drive more consolidated communications to consumers. They found consumer frustration due to lack of transparency and trust that they were getting billed the right amount. Even if you get texts for all of your bills from different physicians and specialists, if they're at different offices they use different websites to process payments. The sites all require my credit card information and I have to worry about my security. But all the physicians send claims to the same insurance companies. Health plans can step in for consumers as well and create a platform for you to make all your payments to all providers in one place. That's a game-changing impact on the revenue cycle.
Q: Where are the biggest opportunities for healthcare organizations to ease the burden of patient collections? What technologies and trends will be commonplace in the future?
SH: If you go to the future, I think the provider organizations are going to get better about clear, transparent communication up front. They will allow patients to pay up front while they're thinking about the bill instead of billing later. More consumer interactions will come earlier in the revenue cycle and that will dramatically lower costs and create more payment activity in healthcare transactions.
There are still a lot of consumers that are new to insurance and don't know what a deductible is, so we need to improve clarity and understanding of insurance plans to help drive consumer collections. Most communications around scheduling, billing and repayment or overpayments will be digital. I don't think the industry can support all of those interactions unless they are digital.