These days, it seems like everyone talks about using data to improve nearly every aspect of healthcare. While it’s true that improvement opportunities exist from the first patient interaction to the last, accessing the right data to identify the right opportunities remains a mystery for many. One health system CEO recently said to me, “We may have a ‘data lake,’ but I only have puddles of usable information.”
When it comes to leveraging data to improve patient collections, many healthcare leaders are still searching for answers. Most have access to performance reports of some kind, but few have access to processes, systems, and datasets built to test multiple scenarios and automatically adapt to new insights and drive continuous improvement. Furthermore, few revenue cycle departments are staffed properly to take full advantage of rapidly evolving data science capabilities.
Step 1: Establish a baseline
As Peter Drucker, the unofficial father of business management famously quoted, “If you can’t measure it, you can’t improve it.” This is certainly true for revenue cycle but what should you measure? Measure how patients are engaging with your financial communications. What percentage of first bills get paid? If you send eBills, what is your open rate and how many of those patients make a payment? If you send text messages, what is your click-through rate? If you offer prompts for self-service payment plans or other financial offers, what is your enrollment rate?
Answering these questions can help you establish baseline data for patient financial engagement within your health system.
Step 2: Segment for success
To get a deeper understanding of your patient financial performance, data should be segmented, since not all patient A/R is the same. Bill-balance segments may be a good place to start. Our research shows that patients with balances up to $400 have higher payment rates but for patients with balances above $400, payment declines sharply unless the health system strategically shifts its communication strategy for this segment. The same goes for patients with balances above $1,000, the communication strategy must shift again to maximize payments.
Step 3: Embrace experimentation to maximize net revenue
Once you have gained a better understanding of who your patients are and how they engage, you can begin to design experiments to improve engagement. A/B testing is a common tactic to start with. To do this, change one factor at a time for a portion of patients and test against a control group.
For example, if you want to improve first-statement engagement to accelerate payments, consider testing a prompt pay discount or proactively offering a payment plan, and see if the patients receiving the offers pay faster than the ones who are not presented with the offers. A measurement process and baseline from Step 1 should help here.
Step 4: Explore machine learning technology
As you can see, there are many data points to test—systematic A/B testing and optimization can require time and patience. Luckily, technology can help by leveraging machine-learning to analyze multiple competing data points and automatically adjust to deliver the best statistical outcome.
Leading organizations are already embracing such technology to improve patient engagement and drive more payments to their health system by building out data science teams or by partnering with organizations that are already embracing these concepts.
Step 5: Repeat and iterate
Improving patient engagement is an ongoing, sustaining strategy, not a one-time improvement. Patient preferences shift as fast as new technology is invented. To embrace patient financial engagement improvement is to embrace a culture of experimentation, creativity, and even compassion. Sure, data may be black-and-white, but delivering a better patient financial experience is anything but. The rewards are great for all parties—when patients are happy, loyal, paying patients, everyone wins