Factors that contribute towards patient centric billing approach

December 05, 2021

As recent as ten years ago, healthcare expense was straightforward from the patient perspective.  You paid your employer a premium, then paid the physician $25 for an office visit, the hospital $150 for an ER visit, and you had a $500 inpatient deductible.  For the average patient, over the recent years the norm has drastically changed.  Now, most patients are faced with high deductible insurance plans, Health Savings Accounts, and increased family out-of-pocket maximums.

Historically healthcare organizations relied on insurance companies for roughly 94% of their revenue.  Today the Healthcare Financial Management Association (HFMA) estimates 35% of provider revenue comes from the patient.  With that payor mix shift providers have been forced to adjust their business model and approach on how patient billing is handled.  While the patient has always been at the center of the care provided, now a patient-centric approach to billing is key.

There are several ways a provider can shift their revenue cycle model to enhance the patient experience and increase the likelihood patients will remit payment:

  • Introduce a user-friendly online product.  In today’s society, mostly everything can be done online with no hold times waiting to speak to a representative or checks “lost in the mail”.  The more information a patient can see with a few clicks, the more likely they are to understand their bill and pay.  A provider can offer pre-set payment plan options via an online portal then send reminder letters, emails, or text messages when the payment is due.Medical bills can be confusing and the sheer number of bills a patient receives from one medical event can be overwhelming.  That is why it is important to have a detailed explanation of the patient responsibility available online. In a 2019 study performed by the Medical Group Management Association (MGMA) over 60% of patients said if they do not understand their invoice, they will likely delay sending payment opposed to calling to get an explanation.
  • Collect Pertinent Information.  Providers need to rethink what data they gather from the patient.  Traditionally basic demographic information included home address and phone number.  Current technology dictates that collecting an email address and valid cell phone number might be as important as home address for billing.  This information can be used for digital communication.  As devices get more intuitive, many automated calls and communication from unknown numbers are automatically blocked and the patient never knows a call attempt was missed.
  • Give patients a choice.  Revenue Cycle teams should allow patients to choose how they wish to receive their bills (email, paper, or link via a text message).  However, the team must monitor how the patient responds to their preferred communication.  If a patient opts for email but no response or payment is received the communication method may need to default back to the traditional paper method.

Obviously implementing a new technology does not happen overnight.  There are privacy and security concerns that have to be considered any time technology is introduced.  But for providers to stay ahead of the shift in patient payor mix these changes need to be made.  Even small modifications can make a difference in how the patient interacts with the provider and impact the propensity to pay.