The ongoing shift to patient-centered, value-based healthcare has presented many health systems with a stark paradox. On the clinical side, we see patients and providers act like engaged collaborators, partners who share similar goals of enduring and positive health outcomes that meet people where they are in life.
The financial side, unfortunately, is the near-mirror opposite. Unexpected costs; multiple, confusing bills; demands for immediate payment in full; icy referrals to collections agencies; and even lawsuits quickly sour that caring, empathetic patient-provider relationship.
The fractured financial marriage between providers and their patients has become so widespread that a health system in Minnesota recently spoofed it in a multimillion-dollar rebranding campaign.
Relationship Status: ‘It’s Complicated’
Like any other relationship, the one between patient and provider is vulnerable to the perfect storm of stressors.
A recent article written by Ron Shinkman and published by Health System Specialist, a service of the Financial Times, explores why a dignified patient financial experience has proved so elusive to healthcare providers.
Let’s just say… it’s complicated.
For patients, out-of-pocket costs continue to rise, even for those who have good insurance. It’s a serious problem that is compounded by the lack of tools to help consumers understand the cost of care or forge a viable pathway to sustainably meet their obligations.
Beyond the ‘kitchen table issue’ of actual medical costs, political volatility surrounding healthcare also has caused a great deal of anxiety. According to a survey from the Kaiser Family Foundation, healthcare is the top voter concern going into the 2018 midterm elections.
For providers, it’s an increasingly delicate balance between sustaining healthy margins without alienating the patient. Profit margins are slim, while hospital revenue collected from self-paying patients continues to rise. Patients collectively are healthcare’s largest payer after Medicare and Medicaid, accounting for 35% of the average health system’s revenue, according to Forbes.
Of course, there are some intriguing silver linings in these dark clouds, thanks to some innovative health systems that are designing patient financial experiences that deliver the same level of dignity, quality and communication offered on the clinical side of the ledger.
Shinkman’s article included perspectives from two VisitPay clients—Michael Rawdan, Senior Director of Revenue Cycle Management and Patient Experience at St. Luke’s Health, and Todd Craghead, Vice President of Revenue for Intermountain Healthcare.
Rawdan explained that St. Luke’s use of VisitPay allowed the health system to consolidate all medical obligations into a single bill. (You can learn more about St. Luke’s work with VisitPay here.)
However, a patient understanding what they owe is just the start. The next piece of the puzzle is uncovering insights into the patient’s ability to pay and customizing flexible and longer-term financial solutions to help them do it.
Last year, Intermountain Healthcare began offering to all of its patients interest-free payments for 12-month loans, with low-interest rates attached to longer-term loans of up to 60 months. Overall yields from out-of-pocket payments improved by 15% to 20% overall, said Craghead. (Learn more about Intermountain’s patient financial experience journey here.)
In Shinkman’s article, VisitPay CEO Kent Ivanoff, explains that the platform’s data analytics software considers 87 different data points that can determine the patient’s ability to pay their bill, significantly mitigating the biggest reason patients don’t pay their bills: Confusion.
Patient engagement is further enhanced by giving consumers the opportunity to provide feedback, which health system’s like St. Luke’s and Intermountain can use to calibrate their financial experience strategies.
A Second Honeymoon
At the outset of World War II, Winston Churchill said of Russia, “It is a riddle, wrapped in a mystery, inside an enigma.” Were he alive today, he probably would have been talking about the patient financial experience.
But it doesn’t have to be that way. There is, Churchill said, a key.
A comprehensive approach to payments helps patients understand what they owe and provides the tools they need to make incremental and manageable payments. This not only improves a health system’s yield and cash flow but also positively impacts non-economic metrics, including patient satisfaction and Net Promoter scores.
In addition, the right approach reduces the risk of patients avoiding necessary care simply because they’re worried about cost or how they can pay.
To meet the needs of patients, healthcare stakeholders must work together to help consumers take control of their healthcare payments—leveraging technology, engagement and education.
By adopting new payment strategies that prioritize billing transparency and are robust, consumer-friendly payment options, health systems can help shape this new healthcare consumer—and create as much trust of providers in the financial arena as in the clinical realm.