How the Lessons of 2008 Can Help Health Systems Navigate 2020
Health systems across the country are quickly adapting to a new reality brought on by the COVID-19 economy. As unemployment has increased nationwide, so the financial burden of healthcare has shifted still further to the patient. Job losses are driving up the number of uninsured Americans causing more financial stress for health systems and households. VisitPay is here to help overcome this financial hurdle, with deep insights into the current patient payment environment, technology and tools to adapt quickly and at scale, as well as the unique recessionary expertise of many of its team.
Through it all, one fact has made itself clear: the traditional approach to the patient financial experience won’t work in today’s evolving world.
Understanding the Uninsured Burden
In order to improve the financial situation facing health systems, it’s important to understand the true scope of the current economic crisis. Simply put, many people are not able to pay their medical bills in full. Even before this pandemic, medical bills were relatively low on people’s payment priority list—so, with mounting economic challenges for many households, patient payment rates will surely decline.
Many of these challenges stem from unemployment. While about half of the 22 million jobs lost to the pandemic have since been recovered, there remain 13.6 million people still without a job. As many workers rely on employer-sponsored health insurance, it’s estimated that a staggering 31.5 million people could be left uninsured by the end of the year. Needless to say, these hard truths change the game when it comes to patient payment rates and the state of health system finances. To learn how to handle this economic shift, it’s helpful to look to the past.
Many members of the VisitPay team have seen similar trends before and know what to expect. During the Great Recession of 2008, a number of our founding employees worked at Capital One Financial. There, the team gained firsthand experience and insight into how consumers behave in times of economic stress. It’s this background that makes VisitPay uniquely prepared to lead through this widespread financial crisis.
VisitPay CEO, Kent Ivanoff, warns that this recession can and will impact all types of patients: “If there’s one lesson I learned from my experience navigating the recession with Capital One, it was that it impacted just about every facet of the portfolio—whether you’re talking about deep subprime, prime or super-prime consumers.”
He offers two pieces of advice for health systems navigating a tumultuous 2020. First, that people respond to—and truly value—any flexibility offered them in terms of payment. Most patients want to pay their bills. By providing flexibility a health system stands to gain both more loyal and better-paying patients. Patients are able to pay their bills in ways that work for them, while health systems can keep their patient payment rates up.
His second piece of advice is to prepare for a longer period of patient payment struggles than one might think. While the deepest part of the previous recession was from the third quarter of 2008 through the end of 2009, payment rates took longer to bounce back. The market can return, and unemployment rates can decline, but—as we saw with the Great Recession—payment rates will take longer to stabilize. “If you look at delinquencies in credit cards, mortgages, and autos,” says Ivanoff. “Delinquencies spiked for almost two years.” So, what can health systems do to mitigate the damage? The answer, to Ivanoff, is simple: adapt. Without flexibility, tailored outreach, and tailored solutions, patient payment rates will fall.
Managing the Payment Gap: Use the Available Tools
One solution to declining patient rates is getting people on smart, tailored finance plans. “Have people pay a little bit,” says Ivanoff. “Keep them in the habit of paying something, rather than have an abrupt halt and expect the engine to refire again.” It helps if health systems can make patients’ bills as easy as possible to pay—treating each patient uniquely and forgoing the traditional one-size-fits-all approach.
VisitPay’s technology allows health systems to create custom payment plans, before or after service, driven by a patient’s propensity to pay, preferences, and many other custom factors. VisitPay also enables health systems to communicate with patients in the method they prefer, ensuring each message is effectively received. With consolidated billing, an easy-to-use digital portal, and other user-friendly tools, VisitPay makes the patient financial experience more simple, more personalized, and more human. And that means more bills get paid.