Collecting payment from patients is one of the biggest challenges hospitals and medical practices face. A recent TransUnion report released in June found that the average patient out-of-pocket cost for healthcare has grown by almost 22 percent this year alone. In an era where patient financial responsibility is expected to continue to grow rapidly as a percentage of overall provider revenue, it is increasingly critical for healthcare providers to collect patient payments both efficiently and effectively. It is also crucial that they understand the huge impact that activities related to patient payment (such as collections) can have on patient satisfaction, patient engagement and outcomes.
Patient financial communications go hand in hand with patient engagement and patient satisfaction to shape a patient's overall experience. Simply put: If patients do not feel good about the financial side of their care, they are likely to feel badly about their overall experience and have lower engagement in their care. So, when patients are angry or upset about their bills, providers can wind up paying the price in the form of lower Hospital Consumer Assessment of Healthcare Providers and Systems survey satisfaction scores and higher readmission rates.
The healthcare industry has come a long way in transforming the dialogue between physicians and patients so that patients feel engaged in their own care while understanding their options and expected outcomes. However, many times this rich exchange and bedside manner do not translate to the back-office billing process of a patient's care. Often, patients don't know how much a service or particular treatment will cost upfront, they tend to get little support from providers in finding comfortable payment options, and they are generally confused about how much of their care they should be paying for themselves. Transparency, flexibility and customer service have traditionally been very sparse in financial interactions with patients, and yet these things are critical to creating a positive overall experience. When providers communicate proactively with patients about the cost of care and offer them flexibility and support with payments plans, it leads to a more meaningful overall engagement and ultimately improves outcomes and satisfaction.
Early estimation of patient financial responsibility is the best opportunity to help patients feel informed and engaged in the financial process of their care. Estimating a patient's financial responsibility means determining what a patient will owe, and communicating the estimate at or before the time of service. This first step gets the financial side of the relationship off on the right foot, ideally setting a tone of accuracy, transparency and proactivity. It is critical to helping patients understand and feel good about the financial and clinical expectations of their care. As providers look to become more flexible and transparent in the billing process, they must clearly and sensitively communicate an accurate upfront estimate to the patient prior to service.
As patient satisfaction becomes increasingly important in the era of HCHAPS and value-based care, providers will need to transition from a culture of collection to one that emphasizes customer service and caring for the patient's financial wellbeing by incorporating several best practices such as accurate estimation, easy-to-understand communications, flexible payment options and online portals with sophisticated payment functionality.
Increasing transparency
In order to increase transparency through patient estimation, it's important to be accurate, clear and consistent through the entire patient experience. When a patient receives a bill that is at variance with the estimate, their satisfaction plummets and they may assume the bill is erroneous. This tipping point can be avoided with an accurate estimation, but calculating a patient's financial responsibility can be a significant challenge with so many possible combinations of patient, payer, plan and procedure, and the difficulty of getting access to the patient’s most up-to-date eligibility, benefit and deductible status. Best practices here include staying current on what payers are historically covering, supplemented with an up-to-date eligibility check to ensure the estimation is as accurate as possible.
Secondly, it is essential to make sure that the patient estimation is clear and easy to understand. The initial communication of the cost and all other corresponding communications should explain the patient’s financial responsibility in a way that makes sense to the patient. After the patient's estimation has been calculated, subsequently use a variety of communication tools such as payment portals or telephone calls to communicate the cost clearly. Consistency of message is also key. After the initial calculation, providers should ensure that all information is consistent with prior messages. This consistency enables the patient to establish trust and confidence when planning for the financial aspect of their care.
Through our work with more than 160,000 providers, we see how important it is to communicate clearly when providing patients with an estimate. Carefully train staff to talk to patients about what they owe and make patient statements easy to read. Patients are less likely to pay a bill that they don't understand. For example, translating arcane codes, abbreviations and jargon into simpler plain language messaging greatly increases collection percentages. Whether written, face-to-face, via portal or over the phone, every interaction with the patient should be clear and consistent on the cost of the service and why the patient is responsible for each portion of what they owe.
Offering flexibility
Another crucial component to meeting patient satisfaction through financial communications is offering flexibility. Flexibility makes patients feel like the provider is on their side, helping them meet their financial obligation as painlessly as possible in an adaptable timeframe.
Providing patients with the option to pay by cash, check, payment plan, or debit/credit card either in the office, online, over the phone or by mail is a great way to ensure prompt and full payment. This adaptability is crucial to ensuring that your payment options and methods align with the preferences of your patient base. While it takes time and resources to set up a variety of payment options, what matters most is offering what is best for the patient. This extra effort makes the patient feel more engaged in the process and confident in the overall quality of their care.
Patient estimation is also closely linked with flexibility. By providing an accurate estimation prior to care, providers can start the financial discussion with patients earlier. During this initial discussion, the best payment timeline and a patient's preferred method of payment can be predetermined to ensure that the patient is onboard with their financial responsibility.
Improving collections without hurting patient engagement and satisfaction
In the past, the financial piece of the patient experience tended to have less impact on patient satisfaction due to the prevalence of fully-insured patients, and less emphasis on collections. As the Patient Protection and Accountable Care Act brings in more patients with higher deductible plans, the medical and financial side of patient care will continue to become more closely intertwined. Despite the trend in increasing financial responsibility, providers can improve collections rates and overall financial performance while increasing patient engagement and satisfaction by incorporating patient estimation into the billing process. Patient estimation is a best practice for many reasons. It not only helps docs get paid faster but it also empowers patients, helping them to determine their financial responsibility and budget accordingly. Ultimately, the goal is to help patients feel as comfortable with the financial side of care as they do with the medical side of their care. Understanding the connection behind patient engagement, satisfaction and financial transactions has become essential for success.
Ric Sinclair is the head of product at ZirMed, a leading health information connectivity and management solutions company. In his role, Ric leads all aspects of product direction, management, design and development.