Loyale Healthcare, LLC, a Leading Financial Technology Company Serving the Healthcare Industry Asks, “Can Technology Save Our Healthcare Payment System?”

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Facing the challenges presented by higher costs, patient medical debt and evolving market expectations, healthcare providers are embracing technology to fend off tough new competitors

Turning Patient Responsibility into Lasting Loyalty

By leveraging technology, providers can reduce cumbersome, unreliable manual processes; segment patient populations for more personalized financial interactions; enable meaningful communications; and meet both parties’ financial objectives.

A phenomenon is rattling the American Healthcare Industry in ways most failed to predict just a few short years ago. The industry calls it “Patient Responsibility”. It refers to the amount that patients owe from their own pockets after their insurance. At one time these dollars, which can be difficult and costly to collect, represented a small portion of a provider’s income. Today, it’s their third largest source of revenue.

It’s not a new phenomenon. It received substantial analysis and recommendations from industry groups such as the Healthcare Financial Management Association (HFMA) as early as 2013. But it has been gaining steam steadily as patient out-of-pocket costs for high deductible insurance premiums, deductibles and balances-after-insurance have gone up year after year.

A 2016 research report conducted jointly by the Kaiser Family Foundation and the New York Times found that in 20% of insured patients struggled to pay their medical bills. There is evidence the problem may be even more serious, with another study conducted this year by The West Health Institute and NORC at the University of Chicago. Their survey found that 44% of potential patients avoiding care because of concerns about their ability to afford it. This is important potential business that providers never had the opportunity to serve.

Higher patient costs and their concerns about being able to afford care have created a new class of patients. These technology-savvy, value-driven consumers are looking for more from their healthcare providers. Some are responding with investments in technology and process improvements. Increasingly, providers that don’t are placing themselves at a competitive disadvantage.

HFMA’s Financial Communications Best Practices, published in the fall of 2013, laid out what has continued to serve as one of the industry’s most comprehensive prescriptions for addressing the issues of rising patient responsibility and accelerated patient consumerism. Developed by a panel of accomplished industry practitioners, the document recognizes that communications and the processes underlying them are central to the goal of delivering a satisfying patient financial experience.

At the risk of oversimplifying the solution for a complex set of healthcare revenue cycle systems and processes, we have developed a measuring stick to help patients and their providers judge for themselves whether they are receiving or delivering patient-centered financial experiences.

The Patient Financial Engagement measuring stick for performance in the consumer-driven healthcare market consists of three performance categories:
1.    Is it compassionate?
2.    Is it open and transparent?
3.    Is it smart?

Effective patient financial engagement strategies rely on technology to execute against each of these categories. By leveraging technology, providers can reduce cumbersome, unreliable manual processes; segment patient populations for more personalized financial interactions; enable meaningful communications; and meet both parties’ financial objectives.

Is it compassionate?

Existing healthcare revenue cycle management systems were developed to calculate and secure payment from what was then their principle source of revenue – insurance companies. These complex systems operate according to pre-established specifications under very precise rules. Patients, on the other hand, do not.

We’ve already established that many (if not most) patients are concerned about the cost of care. Yet, this dimension of a patient’s experience isn’t considered in most providers’ performance metrics. Proof in point: HCAAHPS, the score that the government uses to measure patient satisfaction as part of Medicare and Medicaid’s reimbursement calculation, doesn’t include any patient financial questions at all.

Compassionate patient financial engagement is characterized by the following attributes, among others:

  •     It’s personal. Patients’ financial circumstances and attitudes are as variable as their care needs. One-size-fits-all financial strategies have no place in an environment dedicated to the proposition of “Do No Harm”.
  •     It’s responsive. No one likes an unpleasant surprise, especially when they’re concerned about their or a loved one’s health. When treatment plans result in cost changes, the impact on the patient should be considered in the development of an adjusted payment plan. Conversely, when patients’ financial condition changes, they need to be able to make adjustments that result in longer or shorter payment terms.

Is it open and transparent?

Up to now, healthcare has been immune to the pressures faced by every other consumer-facing industry. When insurance covered most of the cost, patients didn’t worry much about how much their care was. Now that they’re paying a lot of it themselves, they need to know. In fact, more and more, they’re demanding it.

But it doesn’t end there. Ask any group of patients about their healthcare billing experiences. Chances are good that most will complain about having received confusing bills from multiple providers, balances they’re surprised by and explanations of benefits that appear to have been written in Sanskrit.

Open and transparent patient financial engagement, at the minimum, should always include the following:

  •     It delivers upfront pricing transparency. Using any of several industry estimation tools or their provider’s own, patients should have the ability to determine in advance how much their treatment will cost, what will be covered and what they’ll have to pay. They also want to know how reliable your estimate is and what will happen if actual costs vary considerably.
  •     It’s easy to understand and easy to act on. Today’s revenue cycle systems often make it hard for patients to pay. From bills patients can’t understand to the variety of providers they’re expected to pay and the actual payment process itself, it’s no wonder providers spend much more to collect from patients than they do any other revenue source, with less success.
  •     It’s more interested in what patients can afford than just what they owe. Generally, patients want to pay. But when it’s difficult they need options. Whether it’s an upfront discount, short-term payment plan or longer-term loan, they need help fitting it into their household budgets.

Is it smart?

We hear a lot of talk these days about big data, artificial intelligence and machine learning. There’s good reason. Embedded in the billions of bits of data within a healthcare provider’s domain and available to them from outside, are patterns of cause-and-effect that can have a big impact on treatment- both clinical and financial. The analysis of these data is becoming an increasingly important role in healthcare as in other industries.

Given these advancements in other areas, it’s remarkable that many healthcare providers have little or no visibility into the performance of their patients’ financial journey. Patients’ financial experiences, it’s safe to say, start well before treatment begins. And they often last well beyond ‘til the bill is paid. At each step in the patient journey and at every care delivery setting - data should be captured, organized and presented so providers can see what’s working and what’s not. Then, armed with this information make evidence-based decisions about what to do next.

Smart Patient Financial Engagement includes these qualities.

  •     It’s end-to-end. Using data to segment patient populations, it’s possible to begin personalizing the patient experience from the very beginning. Then, based on patient behavior thereafter, modify the experience to suit patient preferences and improve the probability of payment.
  •     It enables better decisions. In the final analysis, a healthcare provider’s patient relationships are among their most precious assets. Patient goodwill and the reputation providers build by nurturing it, is the most potent source for brand and business success. Data-driven, evidence based analytics make it possible to consider patient needs and experiences at every milepost on their care journey.

High Tech to Deliver High Touch

Healthcare consumerism and the high cost of care have converged with other economic and social conditions to create an environment that’s ripe for disruption. But the future for healthcare providers who extend their ethos of care into their patients’ financial experience will continue to dominate the market.

Leveraging technology, these providers will deliver exceptional patient experiences at every setting, on every occasion, to every patient and get the information they need to do better the next time. How do you compete with that?

Kevin Fleming is the CEO of Loyale Healthcare, LLC, Lafayette CA.

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Michael Morrison
since: 05/2017
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