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Managing Patient Payments: A Balancing Act (Part 1)

A growing number of healthcare providers are considering how to reach patients as self-pay responsibility for their medical bills increases, including the option of offering patient loan financing programs at different stages of patient interaction.  The programs help providers lessen their financial burdens and lower bad debt.

Bruce Haupt, president and CEO at ClearBalance, a healthcare patient payment financing company, presented on Understanding Alternative Patient Financing Options at ACA International’s Fall Forum and Expo in Chicago. Healthcare providers use patient financing companies and often expect early-out collection agencies they work with to provide options as well.

“Offering patients an extended payment plan, such as the ClearBalance zero interest loan, doesn’t shift the burden of collecting bad debt,” Haupt said. “It’s really to provide a better patient payment option and give the health system a better collection rate overall.”  Patients’ financial obligations for their medical bills represent 18 percent of revenue for healthcare providers, according to recent research on patient pay from athenahealth.

High deductible health plans are becoming more prevalent today and with that patients’ financial responsibility for their healthcare also increases, even if their monthly premiums are lower.  According to athenahealth, the number of consumers in the U.S. with high-deductible health plans has increased 75 percent since 2010. More employers will offer only high-deductible health plans by 2018 and overall the popularity of the plans is pushing healthcare expenses out of reach for more and more consumers, according to athenahealth.

Providers offering patient financing options can tailor the programs based on their revenue cycle workflow and how they present the options to their patients.  “Revenue cycle leaders care very much about the patient and patient experience. We work with the provider to ensure financial counselors are trained in how to introduce the program.

Ultimately, offering a patient loan program is a value-add that creates loyalty and patient satisfaction,” Haupt said. 

More and more consumers consider their healthcare in terms of price and want estimates for the cost and options for how to pay for it within their budget, much like purchasing a vehicle or home. According to the ClearBalance

Healthcare Consumerism study 2016 results, 91 percent of respondents said healthcare is an expense that requires financing of more than 12 months.  One in three respondents said they would delay care if a financing option wasn’t available through their healthcare provider.

“Patient financing is absolutely intended to be a part of the hospital’s payment policies for patients,” Haupt said. “If you were considering going to a particular hospital for care or surgery, you’re probably going to want to know the cost. That’s what’s happening today with tools for price estimation, for example. People want to know what their cost will be.”

According to a 2016 Experian Health webinar “Providing Patients with Estimates: How Knowing What They Owe Can Boost Your Bottom Line” presented by product manager, price transparency, Elizabeth Serie, as consumers’ out-of-pocket healthcare expenses increase, price transparency information for patients is becoming critical for them to access at any time; allowing them to make educated decisions on how much they spend.

Technology can help patients and providers be on the same page with determining the best cost of care; and providers can implement standardized processes and best practices to communicate with patients, Serie explained during the webinar.  According to Serie, providing patients’ documentation in paper form in person or through mail or email after a visit can be a critical added step to ensure they can make an informed care decision.

And, providers can have a copy of that information readily available when the patient comes in for their scheduled care.  While price transparency continues to be a priority, providers or early-out collection agencies working with consumers on their behalf can discuss patient financing options at preregistration for care, time of service or after care to help ensure payment.  “My recommendation is to engage patients early in the process. Today there are lots of ways to do that,” Haupt said.

“A provider needs to think of patient financing as one component of their overall strategy to address the need to collect patient obligations and provide a good patient financial experience. It’s just a piece, but they need to be clear how it fits in their strategy.”

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