By David Shelton
When a patient presents an insurance card at registration, both the provider organization and patient assume they are past what has become one of the most difficult conversations in healthcare: how the bill will be paid. Unfortunately for many insured patients, especially those with serious illnesses, their financial troubles and the provider’s difficulties collecting may have just begun.
The financial realities of serious illness
Seriously ill patients often require multiple hospitalizations, frequent doctor visits, expensive medications and other support, making them the healthcare system’s heaviest users. Even if patients are insured, the costs of annual deductibles, co-pays, coinsurance, prescription medications and treatments not covered by insurance can be staggering. A study by NORC at the University of Chicago, a nonpartisan research institution, showed more than half of Americans have gotten a medical bill they thought insurance would pay.
In 2018, a poll conducted by the Harvard T.H. Chan School of Public Health, The New York Times and the Commonwealth Fund revealed just how much these costs can impact seriously ill patients and their caregivers. The key finding was that insurance alone is not enough to protect patients from the high costs of healthcare. Ninety-one percent of respondents had health insurance, yet 53 percent of this group struggled to pay their medical bills. More than one-third with insurance said they were forced to use all or most of their savings to pay for care. Some even faced the impossible choice of paying for medication or buying food for their families.
The effect of healthcare costs on patients’ lives can be devastating, but the damage doesn’t end there. Patients’ financial obligations for care can also negatively affect the patient experience, hamper providers’ collection efforts and, ultimately, hurt hospitals’ and healthcare systems’ bottom lines.
How personalized patient payment plans can help
As patients take on more financial responsibility, healthcare providers shoulder more uncompensated care, bad debt and write-offs. The traditional approach to medical billing and collection, where everyone is treated the same, no longer works. Personalized patient payment plans, on the other hand, are an effective way for providers to balance patient needs with revenue goals by considering each patient’s unique situation and finding a solution that works for them. To implement this new approach, providers must have tools, technology and processes to:
- Assess each patient’s ability to pay. Some patients can pay their bills at the point of service (POS), some need extended time and others will never be able to pay. Technology is available that allows registration staff to categorize patients based on credit scores that indicate their propensity to pay, payment history on other debts and residual income that could go toward healthcare costs.
- Offer feasible payment plan options to each patient. Obviously, if a payment plan is too onerous, patients will eventually stoppaying. Armed with knowledge of each patient’s financial circumstances, providers can use a structured methodology that points to the most appropriate payment plans.
- Clearly explain payment plans to patients. Financial conversations can be overwhelming for patients and uncomfortable for registration staff. Training and scripting can prepare registrars to counsel patients on their payment plan options, explain what to expect and help them make educated financial decisions.
Personalizing can increase collections up to 200 percent
The heavy financial load on patients, particularly those dealing with serious illnesses, is a troubling trend in the healthcare industry. Personalized payment plans can ease the burden, enhance the patient experience and measurably improve providers’ financial performance.
Hospitals and health systems that have implemented personalized patient payment plans report good success in all three of these categories. In certain cases, hospitals have reported POS collections going up 200 percent within 60 days of implementation of a solution. Many providers have seen early out and bad debt vendor expenses go down by as much as 25 percent. And, because patients know what to expect and have workable solutions to their financial dilemmas, they perceive the overall patient experience as better and their satisfaction goes up.
Increases in healthcare costs and patient responsibility show no signs of receding. Personalized patient payment plans help providers remain financially viable and deliver the care and experience patients expect.
David Shelton serves as Chief Executive Officer for