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Managing Patient Payments: A Balancing Act (Part 2-The Future of Patient Financing)

Consumers want clear explanations of their bills and options after they receive care as much as they do when they evaluate costs at healthcare providers in advance, according to the 2016 Healthcare Consumerism Study by ClearBalance.

Fifty-five percent of the respondents in 2016 said they are sometimes or always confused by medical bills and 61 percent reported they are sometimes or always surprised by out-of-pocket costs they owe, according to the survey.

Additionally, 65 percent of respondents said clear, easy-to-understand medical bills would have a positive impact on selecting a healthcare provider.

Patient financing options are important as healthcare providers are seeing reduced reimbursement for care, meaning patients have a greater responsibility for their bills and may not have the ability to pay for a high healthcare expense, especially if it is unexpected.  According to athenahealth’s research, 50 percent of providers fail to receive at least $23,000 a year from patients. Forty percent of providers fail to receive more than $31,713 a year from patients.

There are best practices that can help improve collecting from patients, including evaluating patient pay measures such as time-of-service collection rate as well as the number of self-pay days in accounts receivable and bad debt write-offs, according to athenahealth.

According to Haupt in his presentation and ClearBalance Patient Pay Research from June 2014, payment plans can lower bad debt and provide better patient satisfaction. Reducing bad debt and improving patient satisfaction are the top two factors influencing providers’ decisions to offer patient financing options followed by reducing accounts receivable days, immediate cash flow, eliminate collections costs and improving staff and physician satisfaction.

Providers can also identify tools such as training staff, developing a collection plan before a patient’s office visit, time of service collections through card-on-file agreements or payment plans for large balances, and ongoing collection plans to help keep patient payments on track in a way that works for everyone, athenahealth concludes in its research.

For example, athenahealth reports payments plans for patients with high balances on their accounts “are essential for increasing overall collections, especially for practices whose patients are responsible for a substantial portion of the total cost of care.”  Healthcare providers with uninsured patients or a high percentage that have high deductible health plans can also consider time-of-service collections and even a set down payment from the patient, according to athenahealth. 

Card-on-file agreements can also be helpful in collecting patient obligations at time-of service.  Even if the patient’s bill amount is not known, providers and patients can agree to a payment range that will be collected.  “We really are in a two-payer market, with government and commercial payers in one bucket and patients in another,” Haupt explained. 

Providers still must collect from commercial and government payers. As reimbursement tightens from that payer category, providers have no choice but to ensure they collect as much as possible from the second payer category – the patient – to maintain their financial health.

Overall, according to ClearBalance, many patients can only afford medical bills if they can pay for their expense over the long term and through a payment plan.  “Providers should consider patient financing because over time, it delivers better net collection,” Haupt said.

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