Meet the healthcare consumer. Patients are the new payer.

On average, healthcare consumers are now responsible for 30% to 35% of their healthcare bill1.  Patient payment and collection practices are highly complex, and with high deductibles, patients have evolved into a primary payer source. To make matters worse, collection costs are significantly higher for patients as compared to payer collection2.   Patients have a lot going on, and paying their bill is not necessarily a top priority – they have to understand it first. The multiple statements, the differing coverage, all contribute to a sea of confusion.  

What’s shocking is that, only about 19% of hospitals currently collect at the point of service3, relying on the traditional billing statements they mail weeks later. To address this, up-to-date information needs to be leveraged to enable revenue cycle staff to take a more confident, competent, collaborative and compassionate approach to patient financial discussions. It is increasingly important to leverage predictive analytics for patient-centered financial discussions throughout the continuum of the revenue cycle.  For maximum impact, hospitals and health systems should adopt data-driven workflows to drive financial engagement.

  • Verify insurance coverage. Leverage task-driven, user-defined work queues to check all scheduled patients for insurance eligibility, authorizations and benefits. This information forms the foundation for next steps — such as obtaining needed pre-authorizations — as well as for engaging patients in payment decisions. A process that retroactively looks at the outcomes can also foster reengineering and improvement to denials management.
  • Deliver cost estimates. The chances of collecting money from patients after service becomes costlier and is less likely. The longer a facility waits, the less the value of the collection. For example, at 60 days, it drops to 75% of the bill; at 90 days, it plummets to 60%; and after 180 days, the value is only 25%4. By contrast, though, providers are twice as likely to receive payment if they ask for it in advance4. In fact, 52% of people would pay from $200 to $500 or more if an estimate was given at the point of care5. So, providing every patient with a payment estimation prior to service or discharge is a critical piece of the financial planning puzzle.
  • Stratify patients’ ability to pay. There are three types of patients — those who can pay, those who need help paying, and those who cannot (or refuse) to pay. For instance, patients willing to pay but lack an ability to do so may be candidates for financing options or payment programs. Others may not have any ability to pay a healthcare bill (or any other kind of bill) and are likely eligible for financial assistance or charity. 

With proactive and data-driven workflows, staff are empowered to work with patients to offer payment options instead of ultimatums. Rather than acting as “collections agents,” practical data gives revenue cycle staff the unique power to strengthen their organizations’ bottom lines and reduce financial stress and anxiety for their patients. 

1Revenue cycle vendors rush to innovate amid consumer changes in healthcare, Healthcare Finance, 12 Aug. 2015

2 Hospital revenue cycle operations: Opportunities created by the ACA, McKinsey, May 2013

3The Impact of Consumerism on Provider Revenues, Availity research study, Feb. 2015

4Hospitals Ask Patients to Pay Upfront, CNN Money, 29 Sept. 2014

5Key Trends in Patient Payment, J.P. Morgan, 2013

About the author:  Jonathan Wiik serves as a principal at TransUnion, in the Healthcare solutions division. He has over 20 years’ experience in healthcare and has developed several nationally-recognized programs in revenue cycle.