Impact of inflation and other economic pressures: How consumers and patients respond

Current economic pressures — most notably inflation — are having a significant impact on consumers and health systems. But there are strategies and actions that health systems can take related to patient financing and the patient financial experience that drives lasting, positive impact.

During Becker's Hospital Review's 7th Annual Health IT + Digital Health + RCM Annual Meeting, in an executive roundtable sponsored by ClearBalance HealthCare™, Tom Cook, National Sales Manager at ClearBalance, led a discussion with health system executives about the economic challenges they face.

Five key takeaways were: 

1. Economic pressures, especially inflation, are weighing heavily on consumers. The consumer price index (CPI) has increased dramatically over the past 12 months. Mr. Cook shared survey data indicating that 95 percent of Medicare beneficiaries are worried about the impact of inflation on healthcare costs. Among individuals ages 50 to 64 (pre-Medicare), 42 percent are concerned about affording healthcare and 26 percent say that they or a household member has skipped medical care due to cost concerns.
   
   

2. Economic pressures are also affecting the healthcare industry. Many costs have already increased significantly from 2019 to 2022. This includes labor costs as well as the cost of pharmaceuticals, supplies and services. Mr. Cook said that these cost pressures will inevitably lead to continued margin pressures well into 2023.
   
   Roundtable participants described staffing shortages and wage pressures even for lower-level and entry-level positions, such as housekeeping workers or people who work in registration. Positions that in some geographies previously paid $12 per hour have risen to $15 per hour. However, if a convenience store down the street is paying $20 per hour, then the hospital will have to adjust wages to attract talent.
   
   Mr. Cook said that based on research from sources such as McKinsey, "the prognosis is not very good." Unlike transitory inflation, which is seen as temporary, many experts expect to see ongoing inflation for several years. "You're going to continue to get pockets of inflationary pressure; this is not going to go away," Mr. Cook said. 
   
   

3. Patient financing can drive lasting, positive impact. ClearBalance provides outsourced patient financing and patient pay management. These long-term patient financing services provide revenue cycle benefits for health systems while improving the patient experience. Data from a ClearBalance Consumerism Study conducted in 2022 shows that 72 percent of patients rely on the ClearBalance program to manage healthcare costs for their household; 88 percent would refer family and friends to their healthcare facility which offers ClearBalance; and 91 percent say they are very likely to return to their provider due to the availability of ClearBalance.
   
   

4. Even in this challenging economic climate, there are alternatives to doom and gloom and are ways to improve patients' financial experience. Two ClearBalance case studies show what is possible. In one case study, a national health system partnered with ClearBalance to provide patients a more flexible payment program that gave patients more time to pay. ClearBalance took over the portfolio patient debt over 12 months, providing the health system with a cash infusion of almost $30 million. Once ClearBalance worked with patients, there was a 98 percent patient adoption of this program and less than a two percent default rate. This was a win for the health system and for patients.
   
   Another case study involves an East Coast regional health system that was charging patients 9.9 percent interest. Working with ClearBalance, this health system eliminated charging interest to patients, dramatically reduced its default rate and decreased complaints by 90 percent.
   
   

5. Participants are using multiple strategies to deal with economic challenges. Among the strategies mentioned were:
    
   1. Reviewing unprofitable service lines to modify or eliminate them.
   2. Engaging employees to make them aware of financial challenges and help find solutions.
   3. Using marketing campaigns targeted at specific segments of patients, with messaging about not avoiding necessary care and the availability of flexible payment options.
   4. Embedding financial conversations throughout all stages of the patient journey.

In these challenging economic times, which are likely to last, it is important for health system and revenue cycle leaders to explore creative patient financing solutions that provide economic benefits for the health system while enhancing the patient experience. Learn more about Top Performing health systems that are seeing strong financial and patient satisfaction returns.