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Readers Write: The Elephant in the Waiting Room: Healthcare Organizations Can No Longer Afford to Look the Other Way on Patient Pay

September 17, 2014 Readers Write 6 Comments

The Elephant in the Waiting Room: Healthcare Organizations Can No Longer Afford to Look the Other Way on Patient Pay
By Sean Biehle


In the past five years, patient payment responsibility has risen dramatically and continues to increase with the implementation of the Affordable Care Act. More people insured means more people who don’t understand their health insurance and many of the plans on the healthcare exchanges are high-deductible plans. At the beginning of the year, Aetna CEO Mark Bertolini projected patient pay responsibility to climb to 50 percent of the healthcare dollar by the end of the decade.

The New Normal: High-Deductible Plans

Once considered a last-resort alternative for those with limited income, high deductible (HDP) or “catastrophic” plans have gone Fortune 500. As a result, self-pay now includes a lot of the people who have insurance with HDPs.

  • A 2012 Rand research brief estimated that half of all workers on employer-sponsored health plans could be on high-deductible insurance within a decade.
  • The average deductible in employee sponsored health plans was $1,100 in 2013, but deductibles in the healthcare exchanges average between $3,000-$5,000.
  • A report released by S&P Capital IQ estimates that 90 percent of S&P 500 companies will shift their workers from employer-sponsored insurance plans to health exchange plans by 2020.

As more Americans are paying a greater proportion of their healthcare costs out of pocket, getting reimbursed for the patient pay segment could now be the most important number to a healthcare organization’s bottom line. Collecting from patients is estimated to cost up to three times more than collecting from payers. 

Focus on Education

Healthcare organizations should make it their mission to help patients understand their bills, educate them on payment options, and help them navigate any insurance issues. Seventy-five percent of patients say that understanding their out-of-pocket costs improves their ability to pay for healthcare.

Plus, the Hospital Value-Based Purchasing (VBP) portion of the Affordable Care Act returns higher Medicare reimbursements based on patient experience scores. The payment process is integral to the patient experience. Patients who don’t understand their bills, what they owe, and why they owe it tend to give lower scores on patient satisfaction surveys. Last year, 2013, more hospitals were penalized than bonused, leaving millions on the table.

Create a Consumer-Focused Culture

Because patients are paying more, they are using social media and other online tools to shop around for physicians and hospitals that not only provide the best care, but also the best service. Service is more than having a good bedside manner. Service means providing frequent and transparent patient communications, especially as it relates to billing.

  • Emphasize patient satisfaction over collections.
  • Create a consumer-focused culture – align staff incentives with patient satisfaction.
  • Perform patient satisfaction surveys to help identify potential problems before they escalate and determine reimbursement rates.

Be There When and Where It’s Convenient for the Patient

Many patients work and they have to take off work to visit their office or facility. Don’t make them take more time off when it comes to having to figure out their bills.

  • Offer extended call center hours, including open evenings and weekends, to optimize patient access.
  • Offer online payment platforms to provide 24/7 access for making payments, arranging payment plans, and viewing and updating demographic and insurance information.
  • Offer services in multiple languages so no patient gets left behind.

Make It Convenient and Easy for Patients to Pay

Connecting with patients in a meaningful way helps them understand the how and the why eliminates any confusion when it comes to their bills. Show patients how easy paying their bills can be.

When possible, consolidate payments and balances across the entire patient care continuum. This makes it easy for the patient to pay everything in one place and drastically simplifies the patient pay process.

Provide multi-channel patient communications and payment options:

  • Point-of-service (POS) payment portals make it easy to collect balances at the time of service.
  • Automated phone/IVRS options enable payment over the phone.
  • Online payment processing for debit and credit cards and electronic checks provides 24/7 access for patient payments.

Additionally, a number of provider organizations have developed pricing transparency tools for consumers to access clear and easy-to-understand billing information.

Offer Payment Plans Upfront

Medical bills can be daunting and patients are far less inclined to pay on larger balances, especially over $400. However, informing patients of their payment options at the time of billing greatly increases the odds of getting paid.

Offer Incentives for Self Pay

Unlike insurance companies, patients don’t get to negotiate adjustments to what they are charged for a procedure. Sweetening the pot by offering payment incentives can greatly increase reimbursement and patient satisfaction.

Treat Patients with Dignity and Respect During the Billing Process

Patients aren’t just numbers. In fact, we’re all patients, so it’s easy to see how frustrating it can be in the absence of clear, reliable, and efficient patient billing communications. Healthcare is one of the very last vestiges of American culture in which the consumer doesn’t have access to complete transparency to what they will owe before they incur the costs

Until the continuum of patient communications can be fixed from the inside out, it’s imperative to treat each individual with the respect and dignity they deserve throughout the entire billing process. Help them avoid collections at all costs using the strategies above and show them that the care provided continues beyond the bedside.

Expected Results

When focused on patient education and satisfaction, physician groups and hospitals can expect stronger reimbursement on patient balances. Educated patients pay their bills. Satisfied patients translate to higher Medicare reimbursements. Many organizations have seen their reimbursement rates increase by more than 30 percent after adopting patient education and satisfaction programs.

Emphasizing customer service can also help verify insurance and uncover secondary or additional insurance. This can dramatically streamline the revenue cycle process. Many organizations find after talking to their patients they discover additional insurance on accounts originally categorized as patient pay.

Lastly and perhaps most importantly, providing clarity of communications builds patient loyalty and increases trust over time. Patients who are highly satisfied with an organization’s billing process are twice as likely to return. Plus, over 80 percent of patients who are satisfied with their billing experience are likely to recommend an organization to their friends.

Sean Biehle is marketing manager for MedData of Brecksville, OH.

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Currently there are "6 comments" on this Article:

  1. Mr. Biehle makes a lot of good points here, but I think some illustration might be valuable. Dignity and clear communications during the billing process is is helpful, but won’t solve the problem. To put it in terms that are familiar, consider what would happen with car collision repair if the process was similar to having a procedure at a hospital.

    Lets assume that the car is still usable, but you want to get the repair because you have insurance.

    1. You go to wherever your insurance company tells you to go.
    2. Upon bringing the car in and identifying what needs to be fixed, no one can tell you how much it would cost to repair–no one knows the rates. But, you have insurance and you went where they told you, so how bad can it get?
    3. Once the repair is complete, you are allowed to take the car immediately. The repair shop says they’ll send you a bill
    4. 30 days later, the bill arrives and it’s $10,000. You notice the insurance company hasn’t paid yet, so you ignore it.
    5. 60 days later, you get the “final” bill. The insurance company had negotiated rates, so the final bill is $4,000, but they still haven’t paid, so you ignore it.
    6. 90 days later, you get the “final” final bill. the insurance company paid $2,500 and you owe $1,500. Since then, you’ve been living life, had no idea what the bill would be so you didn’t put money aside and you don’t have $1,500. Plus, the car was only worth $2,000, so it would have been really nice to know what the cost would have been before you did the repair. You might have even shopped around first.
    7. At about the same time, you get a bill from the welder that did the welds. Apparently, they are contracted by the collision center and bill separately. Who knew.
    8. A couple of weeks later, you get a bill from the painter. They are a separate service apart from the collision center as well.

    In this scenario, how many different ways is the system broken?
    For healthcare, this is just another day in the life of a Revenue Cycle Manager…

  2. Allen K – Well said!! Pre-visit price transparency should be at the top of that list. I cant think of how many times I have had “sticker shock” over the last few years, and wish I had had the chance to review my options prior to going into debt.

  3. Nice article but you’re way off-base Sean. Healthcare organizations haven’t looked the other way..for many years. The growth of HDHPs started around 2004 (HSAs started in 2003) and most every significant healthcare organization recognized increasing patient liability as a major issue at least 5 years ago. You may want to spend a little more time educating yourself before writing an article.

  4. Gordon, you are correct that high-deductible plans have been growing for some time, but the growth curve has accelerated in the past few years. The number of people with HDHPs ballooned from 1 million in 2005 to 16.5 million in 2013 and analysts predict more companies are going to start adopting HDHPs for their employees. The point is that most hospital billing systems are primarily set up to bill insurance NOT patients and shifting to collecting from patients is a drastic change for most systems. And that’s not just me saying that, it’s the people who run revenue cycle departments at major hospitals.

    See this Chicago Tribune article from last November for more, http://articles.chicagotribune.com/2013-11-17/business/ct-biz-1117-upfront-charges-20131117_1_health-insurance-health-care-health-services

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