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By Matt Hawkins, CEO of Waystar
Medical bills are stressful. In a recent survey of healthcare patients, more than half of respondents said they were more stressed about bills than about their actual medical care, with key problems including surprise bills and a lack of clarity about the final amount owed. This should be a wakeup call for healthcare providers, who care about their patients deeply and invest significant resources into providing excellent medical care, but don’t always give the billing experience the level of attention it deserves.
The Centers for Medicare & Medicaid Services’ (CMS) price transparency rule, which officially went into effect on January 1, 2021, requires hospitals to list clear, accessible pricing information online about the services they provide. It is designed to address patients’ complaints about the lack of transparency surrounding their healthcare costs. Smart healthcare providers will see this as an opportunity to hit the reset button on the patient financial experience as a whole, going beyond the federal rule requirements in order to make the billing process less of a headache for all parties involved.
Putting in the upfront work to improve the billing process pays off in the long run. Forty-five percent of patients say their most recent experience with a hospital billing ofﬁce made them more likely to recommend that hospital to a friend. Price transparency and smooth billing systems aren’t just “nice to haves”; they can have a real impact on patient retention and your bottom line. For providers looking to streamline the patient financial experience, here are three concrete steps you can take to set your organization apart.
Provide upfront cost estimates through patient-facing tools
One of the CMS price transparency rules requires hospitals to publish standard pricing for 300 common services. However, these pricing lists are difficult for patients to interpret and aren’t personalized in any way, which can result in confusion and dissatisfaction.
Patients are eager for clear up-front information on what they’ll owe, which would help them budget their expenses and make informed choices about their health spending. Eighty-one percent say the ability to know their actual out-of-pocket cost ahead of time would inspire them to proactively book appointments — meaning that a better financial experience can inspire patients to take charge of their health and seek the care they need. Strikingly, some are even willing to pay extra for greater accuracy: 59% would pay $50 out of pocket in exchange for receiving an up-front cost estimate.
Even before the mandate, a number of healthcare providers were proactively giving patients upfront cost estimates for services, and they have realized benefits for their practices and their patients. Some providers have looked to online patient-facing tools that can generate more consumer-friendly estimates and provide a better patient experience.
Accuracy is key to making estimates valuable, not only to increase patient trust and satisfaction, but also to enable meaningful discussions around collections. Providers should ensure the estimator tool is truly driving high accuracy results, drawing on and synthesizing robust data to create the most accurate estimates for patients. Only the most accurate estimates provide true transparency into what patients owe, and in turn, give front-end staff the confidence they need to engage in financial discussions.
Personalize your communications and payment options
How and when patients pay their bills varies from person to person. With healthcare costs and patient financial responsibility on the rise, and the emergence of new communications channels, a one-size-fits-all approach to billing patients no longer makes sense. Providers should make an effort to customize financial encounters as much as possible in order to make payment more convenient and less stressful for each patient.
For example, take note of the medium through which patients prefer to pay. A 2019 Waystar survey found a notable gap along generational lines: patients aged 18-39 overwhelmingly prefer to view and pay their bills online, while those over 65 still favor payment by phone or snail mail.
Customized outreach is also important. For example, some patients value short reminders of open balances via text, while others may prefer a phone call or email. More convenient and tailored billing options make it easier to pay on time, leading to less financial stress for patients and providers alike. Empowering the healthcare consumer is no longer a suggestion, but a must in today’s healthcare environment. Providing an experience marked by the right outreach, at the right time, with the right approach is critical for success.
Make financial literacy education part of your mission
At the root of many issues with price transparency is a simple fact: medical bills are confusing. Waystar found that less than half of patients (43%) fully understood their most recent medical bill, and this lack of clarity can lead to delayed payment.
Providers would benefit by offering easy-to-understand patient statements and offering flexible, convenient payment options, such as online portals or text. In addition, simple format tweaks to the invoice itself would go a long way: 41% of patients said that a simpler bill that clearly shows the total balance at the top would help them pay more easily.
Hospital providers care tremendously about the patient experience and empowering patients to make informed healthcare decisions. The complicated nature of healthcare reimbursement makes price transparency a challenge, but putting in the right tools and resources will pay off in the long run, since patients who have a clearer picture of their bill are more likely to pay on time and in full. Most importantly, reducing stress about medical bills—for both patients and providers—allows everyone to focus on what really matters: delivering high-quality health care and an exceptional patient experience.