Hospitals have long received a high percentage of their revenue from health insurers, but the rise in deductibles and self-pay patients have made insurance and Medicare payments a decreasing proportion of revenue.
Patient out-of-pocket medical expenses have risen steeply, and so has bad debt held by providers. A survey developed by PYMTS.com notes that of the $63.7 billion in patient responsibility each year, approximately $7.5 billion goes unpaid. That means more than 11% of all patient balances are never collected.
Becker’s ASC Review reports that in a 2017 analysis by Black Book, 92 percent of hospitals surveyed reported traditional collection solutions are negatively impacting their profit margins.
Is your revenue system capable of adapting to these changes?
To protect their revenue stream, hospitals must adjust revenue cycle processes, and adapt to the preferences of patients as payers.
McKinsey’s 2018 Consumer Health Insights survey found that consumers have sophisticated expectations of their hospitals and providers.  These include:
- Personalization: The experience should be tailored more closely to the needs of individuals.
- Access: The continuum of care should be improved so consumers have access when and where they need it.
- Incentives: Well-designed incentives offer the promise of motivating consumers to make better choices.
- Innovation: New product concepts must be carefully designed to meet consumers’ needs and wants.
Fewer than half of those responding to a recent healthcare payment survey reported using a payment plan, but 89.8% of these patients said they would be willing to consider payment plans in the future. That statistic represents an opportunity for hospitals if they can adapt to proactively offer payment plans to their patients, either at or before the time of service, or when they receive their first statement.
Traditionally, however, hospitals don’t offer a payment plan unless patients request one. When the account is overdue, they may offer a payment plan as a last resort before collection.
To offer a payment plan upfront, hospitals must also provide the patient with an accurate estimate of their total financial responsibility. In fact, patients are more likely to settle their balance or make payments if they have an estimate of the full balance first.
For many hospitals, reluctance to consider patient payment plans is rooted in concern about default. However, with advancements in technology and data analytics, providers can assess a patient’s ability to pay ahead of any collection efforts. With this knowledge, providers can more confidently offer payment plan options to the patients who need them, at terms they can afford, and at the time they are asked to pay.
Providing a comprehensive, patient-centric billing experience before service is delivered can minimize collection efforts post-service. Patients value the power to self-activate payment plans that best fit their financial situation. Hospitals still control the available terms, which can be predetermined based on segmentation qualification.
Encore Exchange delivers a new approach to patient payments
Encore Exchange, formerly CCi, is the healthcare industry expert in patient communications and self-pay management. With nearly 50 years of success in patient balance resolution and revenue cycle integrations, Encore Exchange demonstrates proven ability to drive down bad debt while improving patient relationships.
Encore’s Flexible Business Office™ XBO offers innovative solutions that help patients and hospitals succeed together. Key features of the XBO billing platform include:
- Bill Consolidation: Consolidated billing and payment options across services, facilities, and family accounts, for better expense management
- Sophisticated Analytics: Scoring, payment histories, and behavior economics drive intelligent workflows to deliver patient satisfaction with ideal allocation of resources
- Customized Assistance: Presumptive charity determinations and notifications ensure that patients meeting your organization’s guidelines receive and learn of financial assistance awards
- Optimized Pay Plans: Plans are tailored to patient needs and preferences, assessing ability and likelihood to pay, with convenient mobile and web payment options
- EHR Integration: Integration ensures a secure, streamlined financial experience for the patient
- Patient-Centric Outreach: Professional, empathetic, contact center support puts patients first at all times, and facilitates effective outreach and resolutions
Is your revenue system up to the challenge of today’s patient-as-payer environment?
To learn more or set up a demonstration, click here.