Collecting payments from private insurers, Medicare and Medicaid on the back-end of the revenue cycle is challenging enough.
Now, healthcare providers have a growing new payer group on the front-end that’s forcing a rethinking of the patient registration and collections process – patients. High deductible health plans and co-pays have shifted 30 percent of hospital revenues onto patients’ shoulders, putting provider cash flow and profits at risk.
Providers know traditional back-end collections processes can’t solve the problem. In fact, in a 2017 Black Book survey, more than 90 percent of hospitals said old collection solutions have a negative effect on profit margins and many are turning to new technologies and processes to capture more revenue.1 Technology is certainly an important part of the patient payment equation, but other aspects are often overlooked. Here are four recommendations I give hospitals and health systems looking to improve patient collections, cash flow and profitability.
1. Treat patients as consumers
Healthcare consumerism has been gaining momentum for a decade. Providers talk about it, but few have stepped up to the plate to truly change the way they operate to meet consumer demands. While almost all say meeting consumer expectations is a high priority, only 53 percent have developed the needed capabilities. Many providers don’t know which of their strengths are most important to consumers or how to position themselves effectively against competitors. As companies like Amazon, Lyft and Netflix raise the bar in daily life, the healthcare industry’s slow progress becomes more apparent.
Consumers, including patients, adapt quickly to innovations that make their lives better. When it comes to healthcare, they have many choices and are willing to shop around to find what works best for them. Hospitals and health systems must identify services, such as accurate price estimates, that patients value most and move fast to meet those needs.
2. Personalize the patient financial experience
When it comes to financial responsibility, each patient is different. Some patients have the ability to settle their bill at the point of service (POS), some may need an extended payment time frame, others will never be able to pay, and there are still others that recognize registering and settling their responsibility before POS is a plus that actually reduces financial anxiety. Offering customized payment options based on each patient’s unique circumstances not only greatly increases the provider’s chances of collecting, it improves the patient experience and leads to higher satisfaction and future revenue.
True personalization is possible with a more accurate and meaningful methodology, which assesses patients’ ability to pay based on factors such as credit standing, payment history and income. Payment plans can be customized based on the patient’s residual income and other unique algorithms.
We’ve found that an effective approach is to segment patients on a five-to-one scale as the key step in personalizing these plans.
A designation of five identifies patients most likely to pay in full; four identifies those who have high collections success rates but need more time and slightly reduced payment plans; and three identifies patients who struggle to meet their financial obligations and require additional registration staff attention. Patients designated as a two either have a low likelihood of meeting financial commitments or they may meet hospital charity program criteria based on their federal poverty level (FPL) status. Patients assessed as a one are unlikely to pay and often qualify for the hospital charity, Medicaid, County Indigent Health Care or other financial assistance program.
There are many benefits to a highly-personalized approach to the patient financial experience. It enables the registration team to get to know patients as individuals and tailor conversations to their specific needs. Trained and properly equipped staff members have the confidence to counsel patients on their financial options and establish positive relationships with no financial surprises to the patient.
With a data-driven approach that is personalized by design, and delivered by staff trained to have financial conversations during pre-registration, most hospitals can expect to see immediate and measurable improvements in three important areas:
• POS cash collections will rise significantly – typically 125 percent or more within six months as a result of up-front patient-friendly conversations and payment options
• No-shows and cancellations will drop as much as 25 percent or more because patients know their financial obligations and how to meet them
• Lobby wait times will decrease as much as 25 percent or more because staff members have tools, training and data to expedite registration
For example, St. Luke’s Cornwall Hospital, Newburgh, NY transformed its registration process by consolidating staff functions into a single pre-access center and personalizing the financial clearance process with standardized best practices. The result is that its POS collections improved by 220 percent, and their patient wait times decreased by more than 50 percent.
3. Engage the registration team
Tools, technology and processes can go a long way to improve patient payments, but one-on-one interactions between registration staff and patients are critical moments of truth. Since many hospitals’ registration positions are among the lowest paid and have the highest turnover, training and staff performance reporting are essential to getting maximum value from new solutions.
Working with hospital registration teams to influence patient conversations helps make collections easier and training existing staff to complement their skills rather than bring in outsourced staff, often decreases turnover. This approach works in community hospitals where labor pools are limited and in larger hospitals that want to evaluate staff against key performance indicators (KPIs) in ways its health information system (HIS) can’t.
4. Anticipate what’s next
Patient payments solutions are evolving to make the financial aspects of healthcare easier for both patients and providers, but that’s only scratching the surface. Artificial intelligence (AI), machine learning and other advanced technologies open new opportunities to use data to learn, for example, what types of care patients will need in the future so providers can market appropriate services to them. Reverse analysis of patient data can show what types of business each clinician brings back to the hospital or health system. Machine learning can help providers implement population health management initiatives while managing financial risk in the value-based reimbursement environment.
Few hospitals and health systems are equipped to navigate the future alone. A solutions partner provides forward thinking and actionable solutions to help meet changing consumer and patient needs, increase patient satisfaction scores, improve cash flow and boost profitability.
Bio
David Shelton serves as Chief Executive Officer for PatientMatters, having joined the company at its founding six years ago. He has served in senior healthcare management for more than 15 years, and is also experienced in technology and manufacturing. His expertise includes delivering business growth, streamlining operational management, and generating profitability for PatientMatters and its healthcare customers.
David holds a B.A. in Business Management from Texas Wesleyan University in Fort Worth, Texas. He is a member of both the Healthcare Financial Management Association (HFMA) and Healthcare and Information Management Systems Society (HIMSS).