High deductible health plans (HDHPs) are on the rise. Enrollment in HDHPs among adults with employment-based coverage jumped from 10.6 percent in 2007 to 24.5 percent in 2017, according to the Centers for Disease Control. With higher deductibles and rising healthcare costs, consumers are paying more out-of-pocket for medical care. This is problematic because the majority of consumers don’t have thousands of dollars set aside. According to First National Bank of Omaha’s Savings Survey, 49 percent of Americans report they only have enough liquid funds to cover living expenses for 0-3 months.
With a greater portion of providers’ revenue coming from patients and patients struggling to pay for medical care, it’s no surprise that providers have a hard time getting paid. As more patients go to collections and enroll in payment plans, providers are now serving as lending institutions. Back office staff may struggle to manage the rising number of open accounts and additional employees may even be needed to manage the workload. Even with a fully staffed back office, providers’ strength is providing high-quality care, not necessarily lending. With patients taking on more risk and providers struggling to collect, uncompensated care is increasing as providers write off more.
To help manage patient payments and reduce lost revenue, providers are finding new ways to help patients manage payments, including technology. Providers can work with technology companies to set up online payment portals. These portals make it easy for patients to enroll in payment plans, set up automatic payments and manage their account, reducing some burden on back office staff. Some online portals even connect to clinical information, allowing patients to view their chart or set up appointments. Web portals also have a convenience factor for patients. A patient who is always on the go may find it simpler to pay their bill with a few clicks of the mouse instead of sending a check in the mail.
While technology is helpful in managing patient payments, sometimes a human element is still needed. Oftentimes patients have complex care needs and understanding their care plan (including the financial aspect) can be overwhelming. Some providers are using patient advocates to guide patients through the healthcare process. In addition to helping patients and family members understand care plans, patient advocates can explain a patient’s financial responsibility in easy-to-understand language. By having a better understanding of their financial responsibility up front, patients may be less surprised by their medical bills and will hopefully have a plan in place to pay them prior to receiving treatment. For example, financial counselors at UCHealth in Colorado do more than set up payment plans for patients. They also provide patient education about costs and financial assistance programs, even helping patients apply for financial assistance if they need additional support.
In addition to online payment portals and patient advocates, providers can partner with a financial institution on a patient finance program. Patient finance programs offer benefits to both providers and patients. For example, these programs allow patients to benefit from attractive financing terms. A patient who may have previously put a medical bill on a credit card with a high interest rate can now pay off that bill via a patient finance program at a lower rate. As a result, the provider no longer has the administrative hassle of managing patient payments and it removes the receivable from their balance sheet. Patient finance programs also allow providers to leverage a financial institution’s expertise in lending and credit.
As margins continue to get thinner, it’s important for providers to take a close look at how patients make payments and how different payment solutions may shorten the revenue cycle. By making payments more convenient and easier to manage, patients will not only pay their bills but deepen their provider loyalty.
First National Bank of Omaha’s patient finance program is designed to flow seamlessly with facilities’ patient experience and payment solutions. To learn more about our patient finance program, email us at email@example.com.
First National Healthcare Banking offers a full suite of revenue cycle solutions that allow our customers to focus their time and resources on what matters most – providing the best possible healthcare services throughout our communities. We offer financing for working capital, new construction, renovations, equipment acquisitions and patient financing.
About the Author
Oscar is the Vice President of Healthcare Banking at First National Bank, where he joined in 2007 and has held numerous commercial banking positions. He grew up in Mexico City where he attained his Bachelor's in Economics and interned at the Central Bank. He then moved to Spain and obtained his Master's in Banking and Finance, and finally moved to the United States and received his MBA with a concentration in corporate finance.