Patient payments in an out-of-pocket age

As the U.S. population continues to grow and Baby Boomers enter retirement and later stages of life, overall demand for healthcare will continue to increase, which places a greater burden on those who provide that care.1 At the same time, younger patients may be more concerned with their health and wellness earlier in life and want a more personalized patient experience through integration of technology.

As demand and expectations for care are increasing, patients are paying more out of pocket for their care.2 For example, 85% of U.S. adults who have employer-sponsored health insurance coverage now have a deductible (up from 59% in 2008), and the average deductible is $1,573 (up from $735 in 2008).3 Out-of-pocket costs can create significant barriers to care and lead some individuals to delay or decline treatment. The Federal Reserve reports that 40% of Americans say they could not cover an unexpected expense of $400 without borrowing money or selling possessions, and the average unexpected major medical expense is $1,200.4

When patients decline or defer recommended treatment due to cost concerns, care quality and outcomes can suffer, and healthcare organizations may see a decline in revenue and profitability. When patients do move forward with care, they may still struggle with costs, causing providers to wait longer and work harder to collect payment. In fact, a 2017 study by InstaMed found that 73% of providers say it takes a month or more to collect balances due.5

Making financial conversations a win-win

By taking greater responsibility for cost of care, patients can play a more active role in the decisions they make about their healthcare. Patients may see their spending as an investment in their own health and wellness, and providers who assist with that investment could offer a better patient experience — and have a positive impact on the bottom line. Helping patients understand their financial responsibilities, including copays and deductibles, is an opportunity for practices to stand out. Patient care is no longer only about clinical outcomes; it’s also about helping patients plan and manage their financial obligations and providing options to make payments easier.

These five tips can help you start the payment conversation with your patients:

1. Define your patient-centric financial policies

Before you can implement new policies, you need to define them. Consider what’s not working well. Are your patients confused about what they owe and surprised by larger balances? Is your organization struggling to collect balances due? Are staff members unclear when to request payment or uncomfortable discussing financial matters with patients? Do practices vary among staff members? Answering these questions can help you identify where you may need to create new policies and processes to help your patients and your practice.

2. Communicate and reinforce new direction

Next, communicate policy changes to staff, patients, stakeholders in your organization and others who may be affected. In addition to written documentation, in-person conversations can be helpful when introducing new policies. Be open to productive dialogue, but set clear expectations. Acknowledge that change may not be easy but is often necessary, and commit to supporting the transition with training and tools. Communicating via multiple channels (web, email, letter, promotional materials in the office) can be useful in getting the word out to patients. Educating patients and helping them understand their financial obligations are important.

3. Prepare staff and provide opportunities to develop skills

Delivering basic staff training can help drive clarity and consistency, while building confidence. Training doesn’t need to be extensive and formal, if it is focused and clear. Consider developing checklists, step-by-step instructions or mnemonic devices such as acronyms and rhymes to help staff members understand and remember actions you want them to take. Periodically repeat training to reinforce good habits, correct misunderstandings, allow participants to share observations and ideas and bring new team members up to speed. You can also survey your patients about their experiences and ask for input on ways to improve.

4. Be sincere and supportive

Change can be uncomfortable, and it helps to acknowledge this in an open, honest way. Being genuine and empathetic while explaining the rationale behind a decision and its goals and benefits can be beneficial. Encourage staff members to take this approach when discussing financial matters with patients and remind them that many will welcome this kind of conversation. No one wants to deal with surprise bills, delayed treatment or payment and other stressful scenarios. Being well-informed and working together to find the best way forward can be a positive experience for all involved.

5. Offer options and be open to innovation

Providing options is always helpful. Giving staff and patients the power to decide can help them feel empowered and shift the focus to finding solutions rather than dealing with problems. For staff members, this could mean preparing a few answers for tough questions or providing different ways to offer assistance (e.g., recommend solutions, share materials, refer to third-party resources). For patients, this might entail providing payment options, such as paying over time, making online or mobile payments or using new payment methods — such as CareCredit.

Healthcare financing

CareCredit was founded more than 30 years ago to provide patients with options to pay for out-of-pocket healthcare costs. Today, with consumers assuming greater responsibility for healthcare payments, more than 11 million people have a CareCredit credit card to pay for care for themselves, family members and even pets. With promotional financing for purchases of $200 or more, cardholders can move forward with care immediately and make monthly payments over time.*

CareCredit also helps providers reduce time and effort spent on billing and collections. Our acceptance network has expanded to encompass 210,000-plus provider and healthcare retail locations nationwide. In addition to receiving guaranteed payment in two business days (with no liability if the cardholder subsequently delays payment or defaults**), providers can take advantage of tools, training and materials to help them navigate the payment shift, including the Pay My Provider portal for accepting online payments. There are no enrollment or annual fees for providers, and processing fees are similar to those of bank credit cards.***

Empowering patients while achieving success

The payment shift is here to stay, and a business-as-usual approach no longer provides an optimal patient experience. Sharing information, advice and potential solutions to help patients understand their financial obligations and manage their healthcare spending is valuable. Honest, timely conversations about financial matters can help patients feel invested in their own care and empowered to make the right choices for their health and wellness, working with providers who want the same thing — the ability to move forward with care without delay, achieve the best possible outcomes and do so in a way that is financially sustainable.

Notes:

1. “The nation’s older population is still growing, Census Bureau reports.” U.S. Census Bureau. June 22, 2017. Available from: bit.ly/2sFWQFt.
2. “2017-2026 projections of national health expenditures data released.” Centers for Medicare & Medicaid Services. Feb. 14, 2018. Available from: go.cms.gov/2QbFFXr.
3. “2018 employer health benefits survey.” Kaiser Family Foundation. Oct. 3, 2018. Available from: bit.ly/2Qg4y4i.
4. Federal Reserve Board. Report on the economic well-being of U.S. households in 2017. May 2018. Available from: bit.ly/2LoT78j.
5. InstaMed. Trends in healthcare payments eighth annual report: 2017. Conducted by LHK Partners. Available from: bit.ly/2zn7vZw.

*Subject to credit approval. Minimum monthly payments required. See carecredit.com for details.
** Subject to the representations and warranties in the CareCredit Agreement with Participating Providers, including but not limited to only charging for services that have been completed or that will be completed within 30 days of the initial charge, always obtaining the patient’s signature on in-office applications and the cardholders’ signature on the printed receipt.
***On transactions less than $200.