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Rising Deductibles Force Innovation In Payment Assistance: 5 Steps to a Better Patient Financial Experience

by John Talaga

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Patients have seen a steep rise in their payment obligations for health care. Providers must innovate payment support services to help patients meet their self-pay obligations.

In the years before the 2010 Affordable Care Act (ACA), large insurers and employers met the financial challenge they saw ahead by shifting liability to patients. Over 25% of all commercially insured patients now have High Deductible Health Plans (HDHPs),[1] which carry a deductible of $1,300 or more for individuals and $2,600 or more for families.[2] The recent announcement that benchmark premiums will rise by 25% in 2017 will only continue to increase the number of HDHPs, as consumers struggle to afford even the most basic care. Of those insured via ACA Marketplaces, HDHP adoption is 90%.[3] It should come as no surprise, then, that bad debt is on the rise across the industry. Only about 35% of all Americans have the savings to meet the minimum HDHP deductible.[4]

When patient self-pay was just a small portion of a hospital’s overall revenue, it naturally appeared low on the list of collection priorities. But the typical hospital has already seen a sharp increase in self-pay, and predictions hold that it will rise at a compound annual growth rate of 10% from 2015 to 2019. Hospitals need to innovate beyond the typical approaches by solving the patients’ affordability problem rather than relying on traditional collection and financing alternatives.

More providers are starting to recognize their new role as the patients’ financial partners and think strategically about the patient experience. Many patients who want to pay their medical bills are no longer able to do so all at once. Instead of contributing to the devastating impact of medical debt on consumers, providers have the power to turn the tide.

A great patient financial experience relies on understanding the patients’ preferences as well as their ability and propensity to pay. Aimed at tackling self-pay with the needs of both patients and providers in mind, there are five key steps to effectively manage payment assistance and drive a positive patient experience.



Five Steps to Effectively Manage Payment Assistance and Drive Patient Experience

1. segment self-pay balances

Set guardrails that enforce terms that the patient can afford and that the hospital is willing to accept.

2. make the offer up front 

Present tailored payment support options early, during patient registration, and include the same offers with the first statement after adjudication.

3. self-activate the plan

Allow patients to select the payment plan amount and duration they feel is right for them—including the option to add family members to the plan and roll in new services as they occur.

4. SEcurely collect payment

Safeguard patient card data and reduce PCI scope and audit requirements for payments taken online, in person, and over the phone.

5. measure performance

Analyze financial details, payment plan activity, and performance with a comprehensive reporting tool, positioning hospitals to respond to changes and challenges as they arise. 


 

More Challenges Ahead

While payment plans tailored to consumers’ means and preferences are one of the most effective responses to the bloating self-pay problem, more self-pay payments results in increased credit card use. This opens the hospital up to new challenges including the threat of costly data breaches and high PCI (Payment Card Industry) compliance costs. In our next blog post, OnPlan CTO, David King, will dive into the details of this lurking problem.

For more information, click to contact OnPlan Health at 224-544-5587.


Learn more about innovating your financial assistance program by viewing our prerecorded webinar, The New Wave In Financial Assistance, EVERYBODY Qualifies. View Webinar


References 

[1] https://www.advisory.com/-/media/Advisory-com/Research/FLC/Resources/2015/CFO-Brief-POS.pdf

[2] https://www.opm.gov/healthcare-insurance/healthcare/health-savings-accounts/

[3] http://healthaffairs.org/healthpolicybriefs/brief_pdfs 

[4] http://www.forbes.com/sites/niallmccarthy/2016/09/23/survey-69-of-americans-have-less-than-1000-in-savings-infographic/#10465b3f91ee

[5] Michael Trilli, “U.S. Hospital Bill Payments: A Patient Self-Pay Call to Action.” Aite Group Report, April 13, 2016.