Patient financial responsibility for healthcare costs accounted for 5% of provider revenue in 2000. Today, that number is 35%, making patients the third largest payer just behind Medicare and Medicaid.1 To be sure, the increase in patient responsibility is challenging for providers as they attempt to collect. But it is also a challenge for patients, especially those on high-deductible health plans or for those without coverage. A recent survey found 64% of patients have delayed or skipped care because of costs.2 When this happens, quality outcomes diminish right along with payer reimbursement. But there are things providers can do to mitigate the potential damage to revenue while helping patients get the care they need.
Develop a Price Transparency Plan Now
Unlike traditional payers who have access to the cost of services and member plan detail, patients most often do not. Just as they budget for groceries and utilities, patients need information to help them budget and pay for healthcare costs. But without knowing those costs, doing so can be difficult.
According to a report published by PWC, 60% of patients say they’ve never had a financial conversation with their provider about the price of a procedure.3 A recent provider poll by Change Healthcare supports that statistic. When asked at which stage they were in offering a price transparency tool to patients, 37% of respondents said they hadn’t started and 34% said they were still researching options. Only 29% said they were already offering a tool—somewhat low considering new and impending legislation aimed at improving price transparency and lowering healthcare costs.4
There are simple things all providers can do now to increase transparency and prepare for new mandates.
- Educate staff and management about upcoming legislation to show urgency and gain buy-in for process improvements.
- Leverage tools that generate patient responsibility estimates prior to or at the time of service and ensure staff can understand and communicate the information to patient.
- Recommend self-service tools to patients to help them better understand healthcare costs. Resources such as Nerd Wallet, healthcare.gov, or healthmarkets.com are good options.
- Teach front-office staff how to have a positive financial interaction with patients. This should include soft skills such as active listening and compassion.
When patients understand their financial responsibility, they are more likely to pay.5
Create a patient-centric collections strategy
Having a plan to improve price transparency is just the beginning. To truly improve patient collections, you need to develop a collections process that focuses on each patient’s unique financial situation and preferences—one that mimics a retail experience. And that process should begin no later than the time of service. According to a recent poll by Change Healthcare, 58% of providers still collect the majority of patient responsibility after service is delivered. This approach was fine when patients owed nothing more than a small co-pay. Unless providers adopt a more patient-centric strategy, they risk damaging both their bottom line and patient satisfaction.
Providers have a 70% chance of collecting patient payments when done prior to or at the point of service, but just a 30% chance of collecting after discharge.6