A WHITE PA PER
for Health Systems to Increase Patient Payments
Â© Sirono. All rights reserved.
Table of Contents 03 04 06 08 10 12 13
....................................................................... The Problem: An Introduction .................. Begin the Patient Financial Experience Before Clinical Service ......................... Follow Up on Payment Estimates and Clarify Adjustments
............ Integrate Patients' Preferred Communication & Payment Methods
...................... Use Technology and Processes Built Specifically for Patients
.....................................................Focus on the Patient Financial Experience
................................................................................................. Key Takeaways
5 Strategies for Health Systems to Increase Patient Payments | 2
The Problem More than 65% of patient payments never make it to health systems. Even with current “best practices,” health systems collect less than 35% of patient financial liabilities. The ACA and popularity of high-deductible plans will only make this problem grow in years to come. As developments in the healthcare industry shift greater financial liability onto the patient, health systems will see patient bad debt rise while overall revenue shrinks—unless they start thinking differently about the patient financial experience. The following five strategies offer a path to increased revenue cycle capacity and effectiveness in a new paradigm of patient-payers.
1. The Henry J. Kaiser Family Foundation, 2017 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces, 2016, Cynthia Cox, Michelle Long, Ashley Semanskee, Rabah Kamal, Gary Claxton, and Larry Levitt http://www.investors.com/news/ obamacare-subsidies-to-explode-as-cheapest-bronze-plan-costs-surge-28/ 2. Managed Healthcare Executive, ACA Drives 34% Increase in Copayments, Coinsurance, 2014, by Tracy Walker, found here: http://managedhealthcare executive.modernmedicine.com/managed-healthcare-executive/content/ tags/aca/aca-drives-34-rise-copayments-coinsurance?page=full 3. HFMA’s “Self Pay and The Benefits of Prospective Patient Engagement,” sponsored by Parallon, hfma.org/selfpaystudy, 2016.
The average ACA insurance plan cost will increase 25% from 2016 to 2017 1
34% increase in copayments and patient pay fees since ACA enacted2
90% of patient bad debt is not recovered3 5 Strategies for Health Systems to Increase Patient Payments | 3
Begin the Patient Financial Experience Before Clinical Service Financial advice should begin upon patient scheduling—not after services are rendered and not at point of service. Engaging patients in the financial aspects of their medical care from the beginning sets up a positive financial ending. Consumers appreciate transparency—they reward those who offer it with repeat business, great reviews and referrals. But healthcare suffers from opacity. In no other industry does the customer willingly agree to pay for a service without knowing up front what the end costs will be. Yet, it is typical in healthcare, and patients ultimately make providers pay for the confusion. When providing a patient with an estimate, explaining how the estimate could change and offering to set up a payment plan makes a world of difference for customer relationships and successful patient payments. This act of transparency and customer service does more than set financial expectations— it clarifies the patient/provider/insurer relationship and builds trust. When patients understand their financial responsibilities and believe in their provider, they are far more likely to pay their bills.
74% of patients satisfied with the billing process pay their bill in full4
95% of satisfied patients are likely to return to that hospital for another service4
61% of patients are surprised by out of pocket expenses5
4. 2014 Connance Consumer Impact Study Shows Link Between Business Office, Patient Payment Behaviors and Patient Satisfaction, http://www.connance.com/wp-content/ uploads/6-Connance_Consumer_Impact_Study_on_12-1-14_FINAL.pdf 5. TransUnion Healthcare Survey Finds Cost Transparency is a Top Priority for Patients, http://www. transunioninsights.com/healthcarecostsurvey.
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Accuracy is the biggest challenge that we hear about from our clients.” Melinda Ramsdell Senior Vice President and Treasury Solutions Manager, Bank of America, at the “Engaging Patients as Financial Partners” Roundtable
Follow Up on Payment Estimates and Clarify Adjustments Many patients do not understand that pre-service estimates aren’t 100% accurate—without a timely explanation, patients become suspicious of new charges. Proactive post-service outreach to explain additional costs mitigates patient confusion and refusal to pay. When a patient has a procedure, the physician must react to the patient’s condition and redirect treatment, regardless of the original estimate’s scope of service. But when the patient receives an unanticipated escalated bill—which is so often the case—they become suspicious of the new charges, question their own financial liability, and delay payment or refuse to pay altogether. Even if the patient is happy with their medical care, values the service they received, and would willingly accept additional fees, they generally assume that their insurance company or provider has made an error. A simple patient contact to explain balance changes does more than prove to the patient that they are valued and respected—it clarifies the quality of the care received, expedites collections, and protects revenue.
of American adults received medical bills that were higher than expected6
57% say they received medical bills that were confusing7
6. 2014 Harris Poll survey of 2,016 American adults, conducted on behalf of NerdWallet Health, https://www.nerdwallet.com/blog/health/managing-medical-bills/medical-billsdebt-crisis 7. 2014 Harris Poll survey of 2,016 American adults, conducted on behalf of NerdWallet Health, https://www.nerdwallet.com/blog/health/managing-medical-bills/ medical-bills-debt-crisis
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We definitely have to be more collaborative. Today, patients have so many elements of healthcare to manage. We need to work with our patients to help them ease the stress associated with the financial impact of their healthcare. Amy Floria Chief Financial Officer, IU Health
Integrate Patients' Preferred Communication & Payment Methods Almost every patient still receives medical bills through the mail, but today's consumer is extremely comfortable with online and mobile. Offering digital bills and payment methods makes it easier for patients to pay, which means more patients will not only pay their bills but will do so on time. Convenience is key for consumers, and most Americans equate online and mobile with ease of access. While this trend spans industries, it is especially important for financial transactions. For example, in 2015, the quality of online services overtook branch locations as the number one reason to stay with a bank.8 Sixtytwo percent of all Americans cite digital as their primary means of banking.9 For any business, failing to embrace customer preferences means alienating and eventually losing customers. Businesses that embrace consumer preferences like Amazon and Uber thrive. Health systems must adopt an omni-channel approach to communications and billing, by offering phone, text, email, patient portal and mail options for patient billing and payments. Doing so ensures that people of any age or socio-economic standing will find paying their bills as easy and convenient as possible.
of consumers want to pay their healthcare bills online10
90% of consumers still receive their healthcare bills via mail10
8. Accenture, Banking Customer 2020, Rising Expectations Point to the Everyday Bank, 2015. Found here: https://www.washingtonpost.com/news/wonk/ wp/2016/04/19/say-goodbye-to-your-neighborhood-bank-branch/ 9. Bank of America, Trends in Consumer Mobility Report, 2016. http://newsroom. bankofamerica.com/files/press_kit/additional/2016_BAC_Trends_in_Consumer_ Mobility_Report.pdf 10. InstaMed Trends in Healthcare Payments Fifth Annual Report: 2014, http:// www.instamed.com/wp-content/uploads/Trends-in-Healthcare-Payments-AnnualReport-2014.pdf
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The most important aspect of using an estimator tool is the expectations you set with the patient. Even if you have the most accurate estimator tool on the planet, the actual patient portion can differ for a number of valid reasons that have a material impact on the patient's out-of-pocket costs. Payment plans that automatically adjust to differences between the estimate and the claim ease the burden on the patient and the provider. Dean Skonieczny Former VP of Products at Experian Health, COO of Sirono and expert in patient estimate technology
Use Technology and Processes Built Specifically for Patients As healthcare moves from B2B to B2C reimbursement models, hospitals and health systems need to prioritize their relationships with patients. Follow the lead of consumer-centric industries—adopt Customer Relationship Management (CRM) platforms that display the complete customer profile, history, and next steps on a single screen. Today’s consumers have high expectations for connected, one-on-one customer service. And as patient-consumers ask more of the healthcare industry, health systems need to adopt the tools that consumer-centric businesses rely on to satisfy lofty customer service demands. The most powerful tool is foundational Customer Relationship Management (CRM) software, which consolidates all available information about a lead or customer, analyzes their potential value, records all interactions with company representatives, and automates ongoing sales support efforts. A patient CRM solution must integrate data from EHRs and analyze patient coverage, eligibility and liability, then automatically populate patient CRM touch-points. The features of a purpose-built patient CRM allow health systems to increase t of their customer service while dealing with a far higher quantity of communications. • Guarantor-Centric Contact Management • Multi-Channel Communication • Integrated Dialer & Call Recording • Case Management & Escalation • Business Process Automation • Payment Management • Real-Time Analytics
$5.60 to $1
for companies making new investments in CRM platforms11
27% increase in customer retention using a CRM platform12 11. http://blog.hubspot.com/sales/benefits-crm-system-infographic#sm.0001ocpaj51a vmd21qlpyhv8vqfy3 12. http://blog.hubspot.com/sales/benefits-crm-system-infograp hic#sm.0001ocpaj51avmd21qlpyhv8vqfy3
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This is huge for the healthcare industry, and is the main reason why practices, providers and health systems need to pay attention to what people are saying about their services online.
Laura M. Sams Social Media and Reputation Management Consultant for the Clarion Clinic
Focus on the Patient Financial Experience to Protect Your Overall Revenue Many hospitals and health systems are trying to optimize the patient experience from a clinical perspective—improving bedside manner, offering online patient resources, etc. But great clinical care can be completely voided by a negative financial experience, which can lead to refusal to pay and scathing online reviews. A strong majority of patients visit online review sites such as Vitals, Healthgrades, RateMD and Yelp before choosing a hospital or physician. Unfortunately, patients are far more likely—up to 52 percent—to share negative experiences online than positive ones.13 To complicate matters further, search engines like Google prioritize user-generated content like personal reviews. This means that patient complaints can be among the most prominent aspect of a hospital’s online presence, and negative financial experiences are among the most popular topics to complain about. As 70 percent of people trust online reviews,14 a single billing complaint can cost thousands of potential patients. And that’s just losses to future revenue. Most patients will avoid paying their bills or refuse to pay altogether if left with a negative billing experience, compounding direct losses with collections fees. Billing is the last patient touch-point and final opportunity to impress patients. Prioritizing the patient financial experience can increase direct payments while protecting the reputation of the provider.
of patients consult online reviews before selecting a physician15
of patients who are dissatisfied with the billing process fail to pay their total financial obligation16
13. http://www.marketingcharts.com/online/bad-customer-service-interactions-more-likely-to-be-shared-than-good-ones-28628/ 14. http://www.nielsen.com/us/en/insights/ news/2009/global-advertising-consumers-trust-real-friends-and-virtual-strangers-the-most.html 15. 2015 Softwareadvice.com survey of 1,438 patients in the United States 16. 2014 Connance Consumer Impact Study Shows Link Between Business Office, Patient Payment Behaviors and Patient Satisfaction, http://www.connance.com/wp-content/ uploads/6-Connance_Consumer_Impact_Study_on_12-1-14_FINAL.pdf
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Key Takeaways Although some are faring better than others in protecting their bottom lines, all health systems need to make changes to capitalize from patient-driven revenue cycles. The five strategies covered in this paper all have one thing in common—leveraging the patient financial experience from end-to-end as a means to profit from the ACA and high deductible plans.
Begin the Patient Financial Experience Before Clinical Service
Use Technology and Processes Built for Patients—Not Payers
Follow Up on Payment Estimates and Clarify Adjustments
Focus on the Patient Financial Experience to Protect Your Overall Revenue
Integrate Patients' Preferred Communication and Payment Methods These strategies represent a fundamental adaptation from dozens of high volume payers to hundreds of thousands of individual patients. And it won’t be easy. In order to make this shift, health systems will need to move their billing systems and internal programs to patient-centric models. New technology and CRM platforms—adapted from the B2C world for the healthcare industry—enables health systems to provide a better quality of billing services to a much higher number of patient-payers. The result is a tremendous increase in collections and continued financial stability as the healthcare system continues to evolve. And we can help you get there. Make your shift from rising bad patient debt to maximum patient collections. Contact Sirono today | email@example.com
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