Healthcare financial fitness is a game of inches. Every new billing technology made available to providers can move the needle incrementally, while ushering in new strategies for harnessing customer data.
While healthcare tech advances, sticking with older billing and patient engagement processes might be cost-effective in the short-term. But those traditional processes are increasingly ill-suited to modern healthcare payment strategies. It’s not just an efficiency matter.
Hospitals are losing billions of dollars each year due to outdated tech, generally in the form of lost productivity and increased patient wait times.
The outlook for healthcare providers is rosier than it might seem, but only if new technological advancements are used to address industry problems. Let’s first look at why older billing and engagement processes could hold providers back.
From the patient point of view, it’s easier to process a single bill for all provided services than several bills from different care providers. It’s even more challenging when adding in offsite consultations, lab work and duplicate statements from unpaid balances.
While patients struggle to keep up with all these communications, providers must extend their payment cycles. This carries reputational risk, as patients can become dissatisfied from miscommunications. Patients may not always understand the nuances of their coverage and deductibles, but there is one thing they demand: a clear, upfront summary of how much services will cost in the end.
U.S. hospitals have been experimenting with pre-payment strategies for the past few years, undoubtedly to break the cycle of unpaid bills after services are rendered. The old “treat first, bill later” philosophy no longer works in an era of ever-increasing patient deductibles and out of pocket maximums.
Modern payment processing technology can provide information on eligibility and cost estimates up front, giving the patient valuable insights prior to service. Jana Franks, senior vice president for healthcare business at U.S. Bank Payment Services, notes that “if expectations about payment and available payment options are not being communicated up front, the odds of collecting will likely decrease.”
Think about an average visit to a hospital. Starting with the parking lot fee, the patient or visitor will encounter several other touchpoints for transactions — and each one might have its own separate fulfillment process. For example, the patient may purchase coffee in the cafeteria using their smart phone and pay for a prescription by swiping a HSA card. The patient or visitor might leave the hospital with receipts for coffee and parking, while awaiting bills for lab work, treatment and consultation in the mail.
It all leaves the healthcare experience disjointed and inflexible. Patients become frustrated, which can affect the organizations’ reputation. Given that one-third of medical payments are for non-clinical products and services, choosing not to consolidate payment types on a single platform could further erode patient satisfaction.
Flexibility becomes the ultimate goal for this patient pain point. Modern payment technology can offer a unified system for processing all payments, medical and non-medical. It could also offer flexibility in payment methods, from cash and check to credit or debit cards, and ACH withdrawals.
Patient communication and engagement is just one side of the overall process. With an increasing number of patients enrolled in high-deductible health plans, and complex reimbursement contracts with commercial health insurance plans, providers must address revenue-cycle issues that lead to lost funds and higher denial rates.
This rise in patient responsibility ultimately leads to bad debt, which can also compound the business-side issues for health care providers. A recent Ipsos survey noted that 37 percent of Americans could not pay for an unexpected medical bill exceeding $100 without going into debt. Identifying the signs of potential bad debt early can help the provider avoid losing revenue later on.
Automated payment and remittance reconciliation have the potential to limit denial rates and improve cash flow, especially if they can identify the root causes of the denial and provide workflow automation to correct and resolve the denial in a timely fashion. Having complete and current patient data on-hand also helps to provide quality care from the beginning.
Shifting to newer automated revenue cycle management technology could streamline the manual, mundane tasks of running a health care business — which can sometimes be overlooked in the pursuit of new services.
Patients are demanding more flexibility and transparency in billing and engagement processes. This leaves older healthcare systems gasping for air, in need of a refresh.
Our next article, "How can you best equip your healthcare staff to modernize payment processes?" explores how these processes have been addressed in the field.