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White Paper
How to Make Your Patient Statements a Powerful Engagement Tool
Summary
With more consumers covered by high-deductible health plans, patient payments represent a higher percentage of your revenue. And the primary tool for collecting those payments is patient statements.
Experimentation provides insight to increase engagement and satisfaction.
Whitepaper | Keith Roberts
Vice President of Engagement as a Service (EaaS)
Change Healthcare
Keith is responsible for leading the discovery, development, and deployment of artificial intelligence-based innovations to inspire a better healthcare system through consumer engagement.
Executive Summary
Financial communications are often the last stage in a provider’s direct engagement with a patient, but they shouldn’t be an afterthought. Patient statements represent an opportunity to facilitate fast, full payments while simultaneously building trust and loyalty. And now that consumers are the fastest-growing payer in healthcare services,1 your bottom line can be impacted significantly if statements fail to drive prompt payments.
Improving financial outcomes requires a new approach that puts the patient at the center of your efforts. Through Experimentation—obtaining patient input on language and design—providers can incorporate consumer desires, needs, and behaviors to make statements more effective. You can then measure patient engagement and behavior with methods ranging from empathy-based interviews to artificial intelligence (AI) to validate which designs motivate prompt payment and enhance patient satisfaction.
A 2016 survey of consumers revealed more than 60% found their healthcare bills confusing5. The confusion arose not only from understanding the language of the bill and the services listed, but also from trying to determine the correct amount to pay.
The Changing Payment Landscape
Increased consumerism is one of the leading trends influencing hospital and health system revenues. In 2016, nearly one-third of all insured individuals were covered by a high deductible health plan (HDHP)2 and at the end of 2017, 12% of Americans were not insured.3 Now that patients are financially responsible for a greater portion of their healthcare, they have an increased interest in its cost. Simultaneously, providers are relying on patients for a greater percentage of revenue—a marked change from when payers were the primary source of payments.
It shouldn’t be a surprise for today’s providers that the cost to collect is up to three times higher for self-pay versus commercial insurance accounts.4 There are myriad reasons patient payments can be difficult to collect, from financial difficulties to procrastination; the key for providers is to determine which obstacles they can impact.
A good place to start is with patient statements. A 2016 survey of consumers revealed more than 60% found their healthcare bills confusing.5 The confusion arose not only from understanding the language of the bill and the services listed, but also from trying to determine the correct amount to pay.
According to the survey, when terminology is unfamiliar, patients cannot link their healthcare experiences to the service items on a statement; hospital-specific jargon and ICD10 codes mean little to most patients. Additionally, differences among the amount charged, owed, and paid by insurance can be bewildering.
Forty percent of patients surveyed acknowledged ignoring a confusing bill to see if it would clear up over time.6 One patient admitted, “I wait until I get something from a collection agency; that way, I know it has gone all the way through the insurance.”7
This confusion can cause patients to delay or forego payments; and, here’s another cost to consider: the consequences of losing the opportunity to serve the patient in the future. Here’s what survey respondents said about seeking care from a provider following a frustrating experience with billing statements:
- 56% would hesitate to seek additional care
- 23% would choose not to seek additional care
- 15% would change healthcare providers 8
Research shows us that patient statements aren’t just bills—they’re an important tool both for driving patient engagement and maintaining loyalty.
Measuring the Patient Financial Experience
Too often, organizations measure the efficacy of their billing and statements by tracking printing and mailing costs. However, these metrics neither guide nor measure patient engagement practices, which is where you can effect change.
An effective patient statement will fulfill two needs: (1) it will create a meaningful exchange for the patient, and (2) it will trigger prompt payment, which in turn reduces repeat mailings and customer service calls, and thus collection costs.
Experimenting with statement design enables organizations to drive patient satisfaction and collections by identifying and testing which factors have the most meaningful impact. The key is to use multiple approaches; basic A/B testing of designs has an important place, but it can’t capture the practical or emotional logic behind patient responses, nor can it validate the statement’s effectiveness in payment conversion. Instead, use both qualitative and quantitative methods to measure patient experience and behavior, which can bridge the communication gaps that delay or prevent patient response.
Using the ‘Design Thinking’ Method to Develop Communications
The Interaction Design Foundation describes Design Thinking as “an iterative process in which we seek to understand the user, challenge assumptions, and redefine problems in an attempt to identify alternative strategies and solutions that might not be instantly apparent with our initial level of understanding. At the same time, Design Thinking provides a solution-based approach to solving problems. It is a way of thinking and working as well as a collection of hands-on methods.”9
More importantly, Design Thinking requires human interaction, and human decision making is rooted in emotion. This innovation framework allows you to observe people’s responses and/or reactions and then validate their needs with usability testing.
As outlined by the Stanford Hasso-Plattner Institute of Design, Design Thinking is brought to fruition via five stages (Figure 1).
In his book on Design Thinking, Change by Design, author Tim Brown explains the difference between design and design thinking: “Design is about delivering a satisfying experience. Design Thinking is about creating a multipolar experience in which everyone has the opportunity to participate in the conversation.”10
Designing effective communications for patients likewise entails gaining their input through direct interaction. Empathizing requires learning and understanding patients’ wants, needs, and pain points. For example, our research has shown patients want to understand the service-level information on their billing statements; they need an accurate report of the amount owed, why it is owed, and when it is due; and they want convenient, omni-channel payment options.
According to Bryce Bruner, Director of Communication and Payment Services at Change Healthcare, “Going directly to consumers and observing them to see what their needs are has demonstrated that trust is essential, and trust has been underappreciated within the realm of healthcare transactions.
"Healthcare has become a significant drain on many household budgets,” Bruner explains. “Providers need to approach patients with empathy given they are contributing to the strain, and then deliver a billing experience that is convenient and trustworthy, that delivers some sort of value. If you don’t, you could easily trigger the opposite of the response you desire.”
Only after the work of empathizing is done, through surveys, focus groups, and one-to-one interviews, is it time to start defining the problems and developing ideas to solve them.
Varied prototype statements, whether designed for print or online delivery, can explore how different elements address the issues identified by patients. For example:
- The flow, or sequence, of information may help patients more easily map their own experiences to the billing details
- Different types of graphics may influence how quickly patients grasp their financial responsibility as a portion of overall cost
- Different colors or fonts may draw attention to critical information such as preferred payment methods, payment due dates, or past-due status
Testing these ideas can take multiple forms, from online surveys to a large focus group to one-toone observation with patients from the original empathy interviews. Large-group testing provides the scale necessary for validation, while one-toone observation provides key insights needed to continue improving prototypes.
For example, when Change Healthcare user experience (UX) experts test prototypes for their Patient Billing and Statements solution, they observe patients—sometimes in their homes— interacting with a statement. Patients narrate their experience to provide valuable feedback, while testers watch body language indicators such as eye movement to verify how patients move through information and, most critically, when they stop reading altogether.
Different types of graphics may influence how quickly patients grasp their financial responsibility
Personalizing Communications: The Next Step in Effective Design
Optimizing financial communications based on individual patient attributes is also showing a great deal of promise. Experiments at Change Healthcare have begun to reveal how demographic factors such as age, income, family size, and urban/rural region can influence how a person engages with the presentation of billing information. Here are two hypothetical examples:
This is Nate: He’s young, single, earning enough to support himself, and has few regular expenses. He doesn’t have much experience with the healthcare system, but he’s comfortable jumping on the Internet if he has questions. When he pays his bill, he’s less worried about what his insurance paid than whether it is written in layman's terms, with clear instructions on how to act in response to the bill. A patient like Nate may be most satisfied with a simple bill that gives him the option to drill further into details online or just pay the amount owed.
This is Belinda: She has many more people relying on her than Nate, and more expenses. Although she’s older, she has less disposable income, and fewer resources when she needs support. Belinda wants to be sure she’s paying only for services she actually received, that’s she’s charged the right amount, and that she doesn’t pay any portion of her bill that should be covered by insurance. Belinda is more likely to be put at ease with a statement that provides adequate detail about each service-level item, insurance adjustments, and prior payments along with a clear statement of the amount owed. Personalized communications can promote the exchange of value patients are seeking, accelerating payments.
Without human intervention, an AI system can begin using the most effective variant and draw the less effective versions out of service. Because AI is more accurate and able to monitor continuously rather than drawing samples, the experimentation process is streamlined and results can be validated efficiently.
Phase 2: Quantitative vs. Qualitative Testing to Measure Results
“Qualitative testing helps validate a design, but it does not provide data on efficacy,” says Mike Lo, Senior Director of Business Intelligence, Analytics, and Experimentation at Change Healthcare. “You need quantitative testing, including A/B and multivariable testing, to get real-world data on statements.”
The challenge for meaningful quantitative experimentation is twofold. First, an experiment needs to measure patient response toward the desired action: actual payment. Explore if a particular design or mode of communication influences any payment-related behaviors, including how:
- much a patient pays
- long it takes a patient to pay
- often a patient calls with questions prior to payment
Second, for the highest chance of success, perform the experiment on a sufficient scale.
Few organizations have the resources available to differentiate statements sent to distinct patients, monitor results, then collect and analyze data for a large number of accounts. One effective solution: use artificial intelligence (AI) and machine learning to manage the process.
For example, a hospital or health system can send four slightly different statements to their patients, changing one variable on each, such as placing the call to action (CTA) in a different location. In this experiment, data is collected and analyzed automatically so the provider can see which statement is most successful at achieving the desired behavior, such as timely receipt of payment.
Machine learning then enables adaptation according to the results. Without human intervention, the system can begin using the most effective variant and draw the less-effective versions out of service. Because AI is more accurate and able to monitor continuously rather than drawing samples, the experimentation process is streamlined and results can be validated efficiently.
Experimentation using AI also supports continuous improvement of patient communications and engagement. Just as changes in the healthcare market, especially increased consumer payments, have driven the need to update patient-billing approaches, healthcare organizations can anticipate other trends will reshape patient preferences in years to come.
Choosing a Partner for Patient Communications
Many healthcare organizations are investing heavily in patient engagement. According to a 2017 study conducted by ORC International, more than 26% of provider investments and 34% of payer investments were tied to consumer engagement goals. 12 Many of these efforts, however, have been ineffective. Despite these investments, only a fifth of consumers reported feeling the experience had improved. Even more concerning, nearly a fifth also reported the experience was worse.13
To achieve the type of patient engagement that will convert to bill payment, providers should adopt practices validated by multiple forms of research and experimentation. For financial communications, organizations should seek a partner prepared to offer the following:
Expertise across the patient engagement spectrum
Successfully marrying patient behavior insights to AI and machine learning data takes a broad range of skills, from user experience and visual design to experimentation and data analysis.
Capacity to scale, both in experimentation and in delivery
Testing effective financial communications requires breadth and depth of data. A solution that produces a large volume of statements will deliver the most reliable results. As a point of comparison, Change Healthcare’s Patient Billing and Statements division produces 2.5 billion images and mails 800 million documents each year.14
Guidance on meeting the delivery preferences of diverse customers
While most patients still opt to receive printed patient statements,15 younger generations may opt to receive and pay statements digitally, which can result in significant paper, print, and postage savings.
In summary, seek a vendor that can provide the research, leadership, and innovation to make your patient statements a powerful collections tool.
1 ."The Consumer is the New Payer in Healthcare." NRC Health, 2017.
2. Kaiser Family Foundation. 2016 Employer Health Benefits Survey. Sept. 14, 2016.
3. Luhby, Tami. “Millions More Americans Were Uninsured in 2017.” CNN Money. Jan. 16, 2018.
4. Prince, Beth. “Improving Self-Pay Collections: One Proactive Approach.” Change Healthcare. Jan. 26, 2018.
5. Mad*Pow. A Bill You Can Understand Research Report. May 6, 2016.
6. ibid.
7. ibid.
8. ibid.
9. Dam, Rikke, and Siang, Teo. Interaction by Design Foundation. Feb. 16, 2019.
10. Brown, Tim. Change by Design. HarperBusiness, 2009.
11. Gooch, Kelly. “Study: Satisfied Patients More Likely to Pay Medical Bills in Full.” Becker’s Hospital Review. Mar. 16, 2016.
12. ORC International and Change Healthcare. The Engagement Gap: Healthcare Consumer Engagement in 2017. Oct. 4, 2017.
13. ibid.
14. Change Healthcare internal data
15. Burkes, Paula. “Trade Talk: Consumers prefer paper trail for bill statements, study shows.” Newsok. Jan. 23, 2019.
