Due to rising healthcare costs and the proliferation of high-deductible health plans, patients are taking on more financial responsibility for their care. As a result, they are asking more questions about the costs of care and how much they will be expected to pay out of pocket.
Unfortunately, recent national survey1 results indicate healthcare organizations face challenges with being transparent about financial issues with patients. Respondents note that a lack of cost estimation tools, limited staffing resources, and insufficient payment options create barriers to effectively collecting payments. Organizations must find ways to not only provide more clarity to overcome patient collections barriers, but also review the complete revenue cycle in order to find bottlenecks, streamline workflows, and increase efficiency. Here are three common challenges organizations face when working to improve financial transparency and some tips for overcoming them.
Lack of tools to estimate the cost of care
Consumers are starting to demand cost of care estimates simply because they receive them in other areas of their life. For example, when they get their cars fixed, they expect the repair shop to provide a quote prior to starting the work. As patients are being asked to pay more for their healthcare, they are demanding this same level of transparency from their physicians and hospitals that they expect from other consumer transactions. Providing estimates boosts patient satisfaction because people appreciate the increased insight into the total expense. Patients are also more likely to make payments when they have all the information up front. According to the aforementioned survey, however, only one-third of respondents employ a price estimation tool, which can streamline the process of generating estimates. By committing to using this technology, organizations can seize the opportunity to better communicate with patients and set appropriate expectations, resulting in more reliable payment.
Limited staff resources to focus on patient payment
It used to be that a healthcare provider’s revenue cycle staff focused almost exclusively on obtaining payer reimbursement, waiting until after the patient had seen the physician to begin the process of claims submission, billing, and collections. With patient payment making up almost a third of revenue, provider organizations are realizing that they cannot wait until patient checkout to communicate with patients about what they owe. As such, many proactive organizations are shifting workloads to the front end.
Initially, this move may cause some concern because organizations might worry about staffing constraints. Fortunately, they can address the staffing issue by reallocating back-end staff to the front end, keeping in mind that the ideal staff ratio ranges between 1.5 to 2.5 FTEs per provider. Before making a staffing change, organizations should analyze their current workflow and ensure that the different revenue cycle areas can accommodate the shift. In many cases, as organizations start using technology that helps automate both front- and back-end processes, they will be able to accommodate more work across their existing staff.
Insufficient payment options
The best time to ask patients to make payments is once they have a clear understanding of what they owe and before they complete the entire care episode. However, if an organization has limited methods for accepting patient payment, it may miss opportunities to catch patients when they are ready to fulfill their financial obligations. With the advent of technology—such as online payment portals and secure credit card on file (CCOF) systems—organizations can provide diverse patient payment solutions that allow people to make payments earlier and at their convenience. This is especially beneficial for patients who are on payment plans.
Taking a data-driven approach
While common, not every organization will have trouble with patient payments, and in fact, they may struggle with other aspects of the payment and billing process. It is important for healthcare organizations to have a solid understanding of their strengths and weaknesses so they can focus on those areas that are in greatest need of improvement. The best way to obtain this knowledge is to leverage data analytics that highlight performance in specific areas and pinpoint opportunities. For example, by employing analytics that include the net collections rate, an organization can determine the ROI of cost estimation technology and get a better understanding of potential benefits. Similarly, data analytics can clarify staff utilization, so an organization can identify the best ways to reallocate resources. Finally, financial analytics can provide a sense of how and when patients are paying, so the organization knows what tools to implement to increase convenience and speed payment.
Clearly, the rise in patient payment is not a passing trend, and organizations must address challenges in both patient payments and the overall revenue cycle to remain financially viable. Finding new ways to automate processes, increase transparency, and implement holistic revenue cycle management solutions will allow healthcare organizations to understand and address bottlenecks and inefficiencies in order to streamline the revenue cycle and overcome patient payment challenges.
Reference
- “How healthcare organizations are handling patient engagement & consumerism,” Navicure, August 2016.
