By Ryne Natzke, Senior Vice President of Growth and Strategy, Sphere
With the COVID-19 pandemic exacting a substantial toll on medical practices’ revenues, savvy providers are searching for an edge that can help them stay competitive and build loyalty to retain patients.
In the wake of the pandemic, many providers were left reeling from the associated loss of revenue, reduction in patient volumes, and surging expenses. For example, in July and August, 81% of physicians in an American Medical Association survey said revenue was still lower than pre-pandemic, with an average revenue decline of 32%.
For many practices, patient engagement is that competitive edge. Engaging patients requires clinicians and staff to first take time and effort to understand patient needs, and then deliver to the patient the resources that meet those needs.
Separately, several significant healthcare industry trends have emerged in recent year to drive the need for providers to better engage with patients to increase providers’ financial stability. These trends include the evolution of the “patient-as-the-new-payer” model, the industry-wide shift towards value-based care, and the need for additional education to help patients decipher complex bills.
Consequently, it has become more critical than ever that providers find new methods of engaging patients in the payment process, such as increasing price transparency, offering omnichannel payment options personalized to individual patient preferences, and sending the right payment-related message to each patient at the right time.
Following are five reasons why better-engaged patients are better-paying patients:
1. Patients who understand their bills are more likely to pay them. Most patients don’t avoid paying bill because they can’t pay; they avoid paying because don’t understand what they owe and why they owe it. For example, 49% of patients say the type of treatment they receive doesn’t impact the likelihood that they’ll make a payment at the time of service, according to a TransUnion Healthcare survey in late 2020. Similarly, nearly half of patients say that having a clear estimate of financial responsibility affects whether they see a certain provider.
That’s why it is important to engage all patients – regardless of treatment – by communicating to them before an appointment the how and why of what they’ll be charged, what insurance will cover, and what their out-of-pocket responsibility is – in other words, delivering the right message at the right time.
2. Communicating payment details earlier in the process leads to better engagement and improved collections. Timing is a key element. It is essential that providers capture payment before the patient leaves the office, or else the chances of that patient paying promptly drop substantially.
For example, 60% of patients surveyed by TransUnion were at least somewhat likely to pay their bill upfront if a cost estimate is offered in advance or at the time of service. When given an estimate at the time of service, nearly two-thirds of recent patients said they would make at least a partial payment.
For providers, it is critical to begin the payment process before a patient visit. For example, when sending appointment reminders, do not simply ask whether the patient plans to show up on time. Include a link that verifies insurance and demographic information and indicate the anticipated payment details such as charges, copay, and effect on patient’s deductible.
3. Offering omnichannel payment options that cater to all patient preferences helps build patient loyalty. Communicating with patients on their terms using their preferred communication methods is key to engagement and reducing the lag between billing and payment. An omni-channel approach can include communications via email, call center, Interactive Voice Response, paper, or text message.
Additionally, payment integration with leading electronic health records systems such as Epic’s MyChart enables patients to have a centralized portal to pay bills, check lab results, and ask questions to providers.
4. Patients view price transparency as an important factor in determining their satisfaction with providers. When patients are unaware of the costs associated with a provider visit, it adds to their difficulty planning and preparing to pay. Some patient surveys have revealed that patients don’t just prefer price transparency; they are also willing to pay for it.
For example, 74% of consumers would rather pay $50 out-of-pocket than not know the cost of a primary care visit, according to an Advisory Board brief. Greater price transparency leads to more efficient payment processes and eliminates “sticker shock” by informing patients of exactly how much they owe.
5. Offering payment plans increases the likelihood of patient payment. Unexpected expenses of even a few hundred dollars can present substantial financial challenges for millions of Americans. For example, nearly 40% of U.S. adults reported that they would not be able to cover a $400 emergency with cash, savings, or a credit-card charge that they could quickly pay off, according to a 2019 survey by the Federal Reserve.
These numbers illustrate the need for providers to proactively offer flexible payment options for unexpected and non-routine medical bills. By offering payment plans, providers can free up staff time and expense that would have been devoted to collections, and give patients greater feelings of flexibility, control, and satisfaction.
For providers, the prognosis is clear: To secure a more sustainable financial future, medical practices must first acknowledge the financial realities many of their patients face. Then, they must find ways of tailoring payment offerings and options to individual patient needs to drive better patient engagement that will result in prompter payments, fewer bills going to collections, and better performance in value-based agreements.
Ryne Natzke is Senior Vice President of Growth and Strategy for Sphere, where he is responsible for managing Sphere’s integrated health and payment strategy and largest, strategic accounts across Sphere’s key verticals, including both large merchants and software partners.