Transparency is far more than just an overused boardroom buzzword. It is key to reducing exposure to one of the top healthcare revenue cycle risks facing hospitals, practices, and other provider organizations in 2019 — patient estimates. While it’s obviously helpful to understand a patient’s propensity to pay, it’s also essential for patients to know what he or she can expect to pay upfront.
Patient Pay Estimate Industry Standard?
A well-designed revenue cycle platform completes patient insurance verification and prior authorization services for healthcare providers. These days, such a platform should also include a patient pay estimate feature that automatically calculates a patient’s insurance deductible, copay and out-of-pocket maximum at the outset of care. Before a first appointment, every patient should have a payment schedule in hand.
Patient Pay Estimate is good business. It alleviates the sticker shock many patients typically experience with their first medical bill. At the same time, it offers providers a more reliable road map for predicting incoming revenue. Win-win.
Half of all patients questioned in a 2018 Waystar and HIMSS Analytics survey stated they would prefer electronic medical billing and automatic payment plans for their medical bills. Despite the demand, only 20 percent of providers have the capability to keep a credit card on file.
It’s also important to note that, for some many years now, providers have reported an increasing number of patients are paying more out-of-pocket. According to a recent analysis of hospitals, total revenue attributable to patient balances after insurance rose 88 percent from 2012 to 2017.
When patients must assume a more significant chunk of financial responsibility, the number of payment delays and account defaults also climb, further underscoring the importance of early, accurate information regarding a patient’s propensity to pay and an available payment schedule.
Partially a Communications Issue
The Waystar and HIMSS Analytics survey reveals that nearly 90 percent of healthcare executives believe their organizations are capable of delivering a cost estimate to patients upon request. Ironically, less than one-third of patients are aware they should even be asking for a cost estimate. That’s a vast communications disconnect.
By automating the entirety of patient pay, an accurate estimate and payment plan is seamlessly integrated into the cycle. Patients do not have to think to ask. Every step of their relationship with the provider is transparent and immediate.
Twenty-first-century companies like Amazon and Netflix have proven that a customer-centric business model is the fastest route to industry dominance. Growth strategist Alberto Brea has pointed out that Amazon did not kill the retail business, terrible customer service did. Netflix didn’t kill Blockbuster. Punishing late fees did.
Analysts estimate the U.S. healthcare industry could eliminate 33 percent of its expenditures without impacting the quality of care, mostly by addressing inefficient health administrative practices.