It's become clear that the payment shift is not a short-term phenomenon, and patients are likely to continue being directly accountable for a significant portion of healthcare costs. One recent study projected out-of-pocket spending on healthcare expenses will surge to $608 billion by 2019, an increase of 46 percent in just five years (up from $416 billion in 2014).1 The causes for this increase are numerous and complicated, including rising enrollment in high-deductible healthcare plans; increasing premiums, deductibles and overall healthcare spending; and even demographic and societal factors like an aging population, rising obesity rates and the opioid epidemic.
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While patients are bearing the burden of higher costs directly, providers are paying a price as well. A survey of healthcare practices in the CareCredit acceptance network found providers' number one concern related to billing and collections was the length of time it takes to collect payments, and on average, 14 percent of balances owed ultimately go uncollected.2 Data from Instamed confirms this challenge, with 58 percent of surveyed providers citing patient collections as their top revenue cycle concern; 73 percent reporting it takes a month or more to collect patient payments; and 33 percent saying they write off more than 10 percent of patient collections each year.3
These statistics illustrate what may be an inevitable realization related to the payment shift — traditional financial models are no longer optimal in today's healthcare environment. For many healthcare organizations, policies and processes were developed in an era when collecting from third-party payers was the focus. Now that more patients are assuming greater responsibility for payments, institutions and individuals alike need to adapt.
Many solutions exist to help patients make payments and manage costs or to help providers with collections and revenue cycle management. For example, offering third-party financing can allow patients to move forward with recommended care immediately and pay over time, while saving providers time and effort related to billing. Avoiding treatment delays and declined care — and allowing providers to focus more on patients rather than paperwork — can contribute to better outcomes and increased satisfaction all around.
Even so, simply deploying a new solution isn't enough. It is important to acknowledge the payment shift and communicate with staff and patients in a spirit of transparency and collaboration. Doing so may seem uncomfortable at first, but it provides an opportunity to increase patient engagement and satisfaction, improve employee confidence and advance your organization's business goals.
Define and document
The first step to implementing a new approach to patient payments is defining that approach. Start by considering what's not working well today. Is your organization struggling to collect balances due, investing more time and effort and waiting longer to collect less? Are staff members unclear when to request payment and in what amounts? Are they uncomfortable discussing financing and payments with patients? Are patients unhappy because they're receiving unexpected bills for balances due, having to pay more up front or unsure what they owe and when? Are practices inconsistent, with staff members handling billing and payments in different ways for different patients? The answers to these questions can help you identify areas to address in new policies and processes.
Once you make these decisions, it is vital to document them. Creating financial policy documents can help clarify your thinking and make it easier to share and implement new processes. You'll also have a reference when questions arise and a living document you can update if it needs to change.
Communicate and reiterate
The next step is to communicate your new policies to the appropriate parties. This includes staff members who will help implement the policies, patients affected by them, other stakeholders in your organization and possibly key partners or referral sources.
Written communication can work well for many audiences, and providing access to financial policy documents is important. In addition, in-person conversations are recommended to introduce the new policies to staff, especially those expected to play a key role or make significant changes. Group meetings can work well to discuss new policies, why they are needed, how they should be implemented and expected benefits. It pays to strike a balance between productive dialogue and clear expectations, conveying that you value employees' input, but plans are generally set. It is also wise to acknowledge change is not always easy. Empathize with team members who have concerns and assure them you will support the transition with training and tools to equip everyone for success.
Communicating policy changes to patients can take place via letter, email, an announcement on your website, materials posted in your practice and/or phone or in-person conversation. Using multiple channels is ideal to get the message out effectively in today's information-saturated world.
Prep and practice
Delivering basic staff training can help drive clarity and consistency, as well as build confidence in individuals who are uncertain or uncomfortable. Training doesn't need to be extensive and formal, as long as it is focused and clear. Consider developing checklists, step-by-step instructions or mnemonic devices like acronyms and rhymes to help staff members understand and remember actions you want them to take.
For example, you could create a "conversation checklist" with three items to cover whenever discussing financial matters with patients, or a list of steps to complete during check-in or checkout. You could also share memory aids like MEMO — Mention (financial policies) Early, Mention Often — or "don't delay, talk about pay." In addition to providing tools and tips like these, consider inviting team members to participate in role-playing activities or conversations in pairs or small groups. Periodically repeat training to reinforce good habits, correct misunderstandings, give participants an opportunity to share observations and ideas and bring new team members up to speed.
Be sincere and supportive
In all communications, the most important factor is simply to be sincere. Change can be difficult or uncomfortable, and it helps to acknowledge this in an open, honest way. Being genuine and empathetic while sharing relevant facts, explaining the rationale behind a decision and outlining the goals and benefits can go a long way.
Encourage staff members to be clear, honest and understanding when discussing financial matters with patients. This can help ease their anxiety about having conversations they may consider uncomfortable. Patients may welcome this kind of sincere conversation, since they know the payment shift is an industry reality. Ignoring this fact can lead to surprise bills, delayed treatment or payment and other stressful scenarios. In contrast, being well informed, understanding the reasons for the situation and working together to find the best way forward can be a positive experience for all involved.
Offer options and innovations
One way to make the most of a tough situation is providing options. Even if choices are less than ideal, the power to decide among them can provide a feeling of control and shift the focus to solutions rather than problems. For staff members, this could mean having a few answers prepared when tough questions arise, or multiple ways to offer assistance (e.g., help personally, share materials, refer to third-party resources). For patients, this might mean new options related to payments, such as paying over time, making online or mobile payments or using new payment methods.
As a provider of third-party financing for out-of-pocket healthcare expenses, CareCredit was founded more than 30 years ago to give patients new options to pay for care. Today, with consumers assuming greater responsibility for healthcare payments, more than 10.5 million people have a CareCredit credit card they can use to pay for care for themselves, family members and even pets. With promotional financing for purchases of $200 or more, cardholders can move forward with care immediately and make monthly payments over time.* As a way to help providers reduce time and effort spent on billing and collections, the CareCredit acceptance network has expanded to encompass 200,000-plus provider and healthcare retail locations nationwide. In addition to receiving payment in two business days, providers can take advantage of tools, training and materials to help them navigate the payment shift, including the Pay My Provider portal for accepting online payments.
Engaged and empowered
The payment shift is here to stay, and a business-as-usual approach is no longer optimal. Patients need to understand this (and likely already do). Sharing information, advice and potential solutions to help patients manage their healthcare spending is valuable. Honest, timely conversations about financial matters can help patients feel invested in their own care and empowered to make the right choices for their health and wellness, while working with providers who want the same thing — the ability to move forward with care without delay, achieve the best possible outcomes and do so in a way that is financially sustainable.
References
1 InstaMed, Trends in Healthcare Payments Eighth Annual Report: 2017, May 2018
2 CareCredit, Healthcare Payments Benchmark study, December 2017
3 InstaMed, Trends in Healthcare Payments Eighth Annual Report: 2017, May 2018
* Subject to credit approval. Minimum monthly payments required. See carecredit.com for details