Empowering Patients Helps Improve Your Bottom Line
High Deductible Health Plans (HDHPs) now are the preferred commercial insurance offerings, both to employer-sponsored and individually purchased plans. An HDHP is defined as having an individual annual deductible of at least $1,300, and/or a family annual deductible of at least $2,600.1 However, HDHPs may range from these minimums, which carry relatively high premiums, up to several-thousand-dollars deductibles, and have lower premiums.
While insurance carriers benefit from reduced financial risk, providers and patients struggle to adapt. Patient responsibility accounts for a growing percentage of a practice’s accounts receivable, and that number can be even higher in the early part of the year as many plan deductibles reset in January. Providers that don’t take action are putting their practice revenue at risk.
Know what they owe
Many members of HDHPs don’t understand how their plans work because they haven’t adjusted to the new paradigm of taking on the majority of the “downside risk” that insurance companies historically carried with traditional plans. We’ve all overheard friends’ and coworkers’ misconceptions of their plan design, or their bill shock once they realize that for the first $1,300, or more, depending on the plan, they are responsible for paying all expenses themselves.
Price transparency is becoming increasingly important as we usher in the new era of healthcare consumerism. As members seek higher quality affordable care, many provider offices that have yet to embrace a price transparency policy may lose current or potential new patients. Cost-of-treatment conversations are often hampered, not for competitive or proprietary reasons, but because the provider’s office lacks the capacity to reflect the member’s specific benefits and plannegotiated price discounts.2 But when it comes to understanding what patients owe, providers can no longer afford to be uninformed.
Technology can help
Fortunately, providers now have access to simple financial clearance tools that help both them and their patients understand what is owed. It also helps providers begin the conversation with their patients. One of these tools is a patient responsibility estimator, which provides accurate and timely estimates of a patient’s financial responsibility based on their insurance plan and benefits. Providers can print a copy of the estimation and share with their patients either before their appointment, or at the time of service. Doing so empowers patients by helping them prepare ahead of time to determine the best method of payment. It also increases the likelihood that the provider will be paid faster and in full.
Unlike hospital financial clearance solutions, which can take many months and thousands of dollars to implement, provider practices can take advantage of smaller-scale solutions that are quick to install, and fit seamlessly with their practice management systems.
Putting it all together
Consider this: With the percentage of a provider’s revenue coming directly from patients expected to increase by 50 percent in the next three years, it’s easy to see how important it is to help educate patients about their payment responsibility3 It begins with communication. Providers need to:
- Educate staff and practitioners about the new reality of HDHPs and how they impact the health of the practice
- Provide accurate estimates to patients, either prior to the appointment or at the time of service, to help them understand what they will owe, beyond just copays and deductibles
- Use technology by implementing a patient financial clearance solution that fits within existing workflows and integrates with the existing practice management system
At Change Healthcare, we often talk about “the consumerization of healthcare.” We expect that plan members will eventually adapt and respond to the new HDHP paradigm by becoming more educated on how their insurance works. Once enlightened, informed consumers will take a proactive role not only in their choice of treatment they wish to receive, but also in where to receive treatment. Providers can begin today to prepare for this new reality. The health of their practice depends on it.