Patient financial responsibility – or the amount of out-of-pocket healthcare costs patients incur – has been increasing in recent years, presenting a new foil to the patient experience. Providers must both adjust to consumer-centered healthcare as well as develop patient engagement strategies to collect payments.
Healthcare providers are noticing an increase in patients taking on more financial responsibility. According to a 2016 Instamed survey, 74 percent of providers said that patients were saddled with more out-of-pocket costs in 2015, likely due to the changing shape of healthcare coverage.
For example, more patients are opting for health plans with higher deductibles and out-of-pocket costs because these plans usually come with lower monthly premiums. According to CMS, 90 percent of the 12.7 million consumers in the health insurance exchange program selected a high-deductible plan during the 2016 open enrollment period.
While high deductible plans are less expensive for patients on a monthly basis, they leave patients liable for an extraordinary cost burden when they do access care or experience a health emergency.
Increasing patient financial responsibility has a side effect of often putting limitations on patient healthcare access. As out-of-pocket costs increase and patients are strapped for cash, many opt out of specialist care.
Additionally, increased financial responsibility has altered the way in which healthcare professionals must interact with patients. In addition to ensuring patients continue to access necessary treatment, high patient costs have driven some healthcare professionals to view the patient as a consumer, changing the patient-provider dynamic and patient bill pay process.
Understanding how payment impacts care access
A 2016 survey from the Physicians Foundation found that although 90 percent of patients are satisfied with their primary care, many aren’t accessing services due to high medical costs. Two-thirds of patients are worried about being able to pay their next medical bill, while 40 percent are currently in medical debt.
One in four patients has skipped a medical treatment or follow-up appointment because costs were too high. Eighteen percent of patients have skipped doses of medicine due to costs, while 27 percent have avoided filling prescriptions altogether.
Prolonging or forgoing treatment can have negative consequences and lead to adverse health effects down the road, experts say.
"As a physician, it greatly concerns me that people are waiting until their medical conditions deteriorate to seek emergency care, which can have lifelong consequences," said Jay Kaplan, MD, a past president of the American College of Emergency Physicians (ACEP).
The current state of patient healthcare costs leaves patients with extremely difficult decisions. Patients sometimes must choose between affording their healthcare and other necessities such as food or housing. In those cases, healthcare falls by the wayside.
And when patients do face an unavoidable health crisis, increasing patient financial responsibility severely hinders them.
"Patients can't choose where and when they will need emergency care and should not be punished financially for having emergencies,” said the ACEP’s current President Rebecca Parker, MD, FACEP.
“No insurance policy is affordable if it abandons you in an emergency."
In order to improve the status quo, healthcare professionals must focus on strategies to help patients manage increasing healthcare costs. By putting forth cost-cutting solutions and creating bill pay efficiencies, healthcare organizations can help support the patient experience amidst increasing financial responsibility.
Leveraging alternative care options
When patients face high out-of-pocket costs, they want to make sure they access care in affordable settings. According to an ACEP poll, 19 percent of patients are considering less costly treatment avenues such as retail clinics or telehealth.
Retail clinics are clinics that solely exist in a retail settings such as pharmacy or grocery stores. Neither an urgent care center nor a physician’s office, these clinics offer treatment for common ailments such as the flu, ringworm, or ear infections, according to the Center for Advancing Health (CFAH).
Retail clinics are both a convenient and budget-friendly treatment option for patients. These clinics usually offer standardized payment menus for individual services that tend to be less costly than traditional physician office visits. By offering an up-front cost estimate for each visit, retail clinics allow patients to budget accordingly before seeking care.
Telehealth likewise offers an alternative for patients looking to cut their own healthcare costs. The American Hospital Association says telehealth costs are generally lower than in-person primary care costs, although the exact difference depends upon the telehealth provider.
Telehealth also offers flexibility for patients. Instead of having to use sick time or call out of work, potentially forgoing a day’s pay, patients can receive care for a simple ailment via video conference.
However, seeking care in alternative and cost-efficient settings comes with a caveat. Clinicians should advise patients that retail clinics and telehealth are best for replacing in-office treatment they planned on seeking. Patients will incur more costs if they utilize these offerings when they otherwise would have waited out symptoms at home.
In a study published in Health Affairs, researchers found that telehealth can cut costs, but only when the technology was utilized in place of in-person office visits. Similarly, a 2016 study of retail clinics from the RAND Corporation showed that patient over-utilization reduces retail clinic cost savings.
Creating a retail-style patient experience
Because patients are paying more for their healthcare, experts say organizations should offer a quality experience worth paying for, lest they choose to receive care elsewhere.
In order to build a better patient experience, healthcare organizations should adopt a patient-as-consumer strategy. With increased buying power, patients have become healthcare consumers who shop around for the best deal for their healthcare and are conscious of how they spend their healthcare dollars.
“As consumers have more choice and healthcare decisions impact their wallets more, they will increasingly compare their healthcare experience to the expectations they have developed in other aspects of their lives,” said Banner Health Vice President of the Consumer Experience Center Dave Kriesand. “Healthcare organizations will need to live up to a new service expectation if they want to continue to win the business of their service savvy customers.”
At Geisinger Health System, experts have created the Proven Experience program, essentially a money-back patient satisfaction guarantee, said a report from PricewaterhouseCoopers. Nearly one year following program implementation, the health system had refunded $120,000 to patients.
Considering the cost of healthcare and the volume of patients seen, this is not a large figure, Barbara Tapscott, Vice President of Revenue Cycle, indicated to PwC. Instead, the program has done a lot to improve patient loyalty.
“People thought, we’re just going to give money away,” Tapscott said at the Healthcare Financial Management Association 2016 annual conference.
“We haven’t, but it took that leap of faith. We’re not doing anything significantly different from what we’ve done before. But we have to put the focus on the patient’s experience. This is how we build loyalty.”
Developing convenient, transparent patient bill pay tools
Healthcare organizations must create clear and convenient strategies to collect patient financial responsibility, not only to support the organization’s revenue cycle, but also to drive patient satisfaction. After all, most patients don’t like being hounded for bills they thought they already paid, and would rather providers make the payment process simple.
As a result, healthcare organizations also need to incorporate retail-style strategies into their patient bill pay protocol.
For example, healthcare organizations should have better price transparency or use cost estimators to ensure patients know how much they will spend before receiving a treatment.
Other healthcare organizations are implementing payment plans to help patients budget for their treatments.
At Family Health Care Medical Group of Modesto, billing manager Tabitha Hickerson, CPC, says their payment plans keep patients from having to choose between healthcare and life necessities.
“As primary care physicians, our number one focus is patient care,” Hickerson said. “With patient out-of-pockets continuing to grow each year, we wanted our patients to be able to have the peace of mind to make treatment decisions based off of medical necessity and not their finances.”
“For us, letting patients know that we’re willing to work with them on the balance provides a sense of compassion to their health and shows them that it’s not all about the money, as important as that is,” she continued.
Hickerson and her team also leveraged online bill pay to streamline the patient payment process. This not only supported revenue cycle management, but improved the patient experience, as well.
“The biggest goal was just to make things easier for the patient and to automate things a little bit more. Just to streamline and create more efficiency,” said Hickerson.
“We had received quite a few patient complaints – it was difficult to reach us, even when they were calling to make their payments and they didn’t have a question about their bill or anything like that.”
Research shows that patients prefer streamlined, electronic bill pay. According to the Instamed survey, 70 percent of healthcare consumers prefer electronic bill pay to paper statements, and 64 percent are interested in electronic bill pay via a mobile device.
“One thing that we’ve heard repeatedly – and these are anecdotes, but they’re anecdotes that come up a lot in conversations with clients with high portal adoption – is patients even without a ton of emphasis from practice staff will often choose to pay online,” said David Clain, Manager at athenaResearch
“It’s easier in a lot of cases, especially for tech-savvy patients, to get a bill electronically, to go online, see what they owe, see why they owe that amount, what visit it’s from, and pay by credit card right there rather than having to submit a check in the mail.”
When it comes to patient financial responsibility, healthcare organizations must focus on two separate priorities – ensuring patients can access, afford, and conveniently pay for their care, and keeping the healthcare revenue cycle afloat.
By adopting patient-centered strategies, healthcare experts can support both goals. By making sure patients can access affordable care, healthcare organizations can make sure their patients remain healthy and satisfied. And by creating patient-centered bill pay, organizations secure patient payments while creating a retail-style experience that is easy and convenience for patients.