Every year, patients face out-of-pocket expenses valued at $63.7 billion, making up an estimated 35% of provider revenue. When combined with the continual reduction of payer reimbursements and an increase in financial burdens and value-based care, hospitals have had to make difficult decisions. For most, the first step is cutting costs. But many are turning to more extreme measures. Closures have become commonplace, especially in rural areas. Mergers and acquisitions have increased as well with more than 200 transactions in 2017 and 2018. While all those options are viable depending on the situation, they aren’t always beneficial to patients and communities. Cutting staff and delaying facility updates or the purchase of newer equipment can damage care quality and the patient experience. Closing rural hospitals leaves healthcare deserts that can put entire communities at risk. And the cost saving benefits of M&A is still debatable.
But looking at the problem from a top-down, financial-only perspective reveals only a partial picture. Instead, hospitals need to step back and evaluate their problems not based solely on cost-savings but on taking a new approach to the revenue cycle.
Patients as Payer
Now that patients owe more of their own healthcare costs, they are demanding more options in the way they are billed and the way they pay. When surveyed, more than 90% of patients say they would pay their balance either early or on schedule if they had a payment plan.
Traditionally, hospitals only offered a payment plan reactively, as a last resort and did not have technology or resources to manage the payment plans. When amounts due were smaller, that wasn’t a problem. But with the adoption of high-deductible health plans, those amounts have significantly increased and patients—even those with insurance—are struggling to pay them. Sixty-two percent of patients surveyed who were experiencing medical bill problems said they were covered through employer, public, self-purchased, or other plans.  And 75% said their co-pays, deductibles or coinsurance were more than they could afford.
In short, yesterday’s revenue cycle process—designed to bill insurance companies—isn’t effective for collecting patient payments. It’s no longer a provider-insurance company revenue cycle. It’s now a consumer-driven system and it requires a revenue cycle that centers around making it easier for patients to pay.
Fast-tracking Your Patient-Payment Strategy
One of the best ways to transform your outdated, ineffective revenue cycle into a patient-centric system is to partner with industry experts who offer integrated patient payment and engagement solutions. Hospitals must be careful when choosing a partner though. Piecemeal offerings such as stand-alone patient portal solutions will fall short and you will be unlikely to achieve your optimal revenue goals. Instead, hospitals need to look for a partner with an integrated solution that streamlines and standardizes the entire collections process across the enterprise. Following are four features you should look for when choosing a revenue cycle partner.
Smarter propensity to pay (P2P). While many hospitals have a propensity to pay tool, they often are based solely on a credit report. But credit reports are only a snapshot—and a partial one at that—of a patient’s financial situation at a single point in time. They don’t provide a full picture of a patient’s payment behavior or complete payment histories. Without this depth of analytics, hospitals may be turning financially viable accounts over to collections too soon and leaving money on the table.
Payment plans. There are numerous solutions that can make it easier for patients to pay. Responsive payment plans, offered prior to service, is the single best solution hospitals can implement to increase patient collection success. These payment plans are customized to each patient’s unique financial circumstances and are flexible enough to change over time as a patient’s situation changes. When patients know their hospital is willing to work with them to ensure they can afford the care they need, it not only increases collections, but it can also increase loyalty and improve a hospital’s reputation in the community.
Digital payments. A full 95% of consumers surveyed say they would like the option of paying their medical bills online but only 20% of providers are able to manage payment methods other than checks, cash, or debit or credit cards. Online payment portals that offer self-select plans, automated phone payments, and mobile payments are essential features of an effective digital payment offering. This gives patients multiple options for paying when and how it’s most convenient for them. And that makes it more likely they will pay on time and in full.
Consolidated billing. Healthcare is not a “one and done” experience. It’s ongoing throughout our lives and the lives of our loved ones. Combining all a family’s medical bills into a single account with a single payment can simplify the process for patients and help make it easier for them to manage their expenses. With consolidated billing and statements, patients can see at a glance their entire financial obligation. And when new charges are incurred, they can easily be added to the payment plan, reducing the likelihood that patients will skip or postpone care due to costs. And that can lead to better outcomes and increased reimbursement.
60% of patients with medical bill problems have put off or postponed needed care. 
Patient-centric payments and engagement. Outsourcing your patient accounts to a partner can be a gamble, especially since so many organizations and agencies don’t follow industry best practices. Hospitals should look for a partner that understands they are acting as the face of your hospital. They need to embrace your culture and treat patients with the utmost respect. After all, these patients are likely to represent—at least in part—future revenue for your hospital. A poor payment experience can lead to negative online reviews and decreased patient satisfaction scores.
65% of consumers surveyed said they would change healthcare providers if it meant receiving a better financial experience. 
A New Approach
The typical revenue cycle was designed to accommodate the provider-payer reimbursement process. But when today’s consumer is responsible for nearly a third of provider revenue, that same revenue cycle won’t work. Hospitals that try to fit patient payments into a payer-focused process will continue to struggle with longer AR days, slower cash flow, higher collection costs, and increasing write-offs. Partnering with industry experts with a full integrated suite of solutions can help hospitals achieve a more strategic, patient-centered revenue cycle faster.