An increasing number of Americans have high-deductible health insurance plans. These plans are designed to help people pay medical costs, but the patient pays a large percentage of the costs until a large deductible is met. And for some Americans, paying those expenses out of pocket is a huge financial burden. Over 50 percent of Americans with job-based coverage report that in the past year, they or an immediate family member have put off going to the doctor or filling a prescription, or have otherwise delayed meeting some sort of medical need due to cost. One in five reported draining their savings account to pay a medical bill, and one in six reported making a difficult sacrifice to pay a medical bill.
As a result, some practices offer in-house financing options to ease the financial burden on their patients, but these offerings don’t come without risk. In some cases, that risk can jeopardize a medical practice’s financial future. So how can you provide patients with flexible payment options they need while keeping your practice safe and secure?
Medical practices can improve patient satisfaction without adding risk by working with a partner that is an expert in managing that risk and in providing personalized payment options and solutions.
The Risk of Patient Financing
Payment plans are an attractive option for patients. A large healthcare bill can feel overwhelming, and knowing that one can pay a little every month eases that burden. In-house financing, however, isn’t always a seamless process, and many practices get loaded down with bad debt. Late payments and uncollected accounts can quickly take a toll on even the strongest of practices.
The problem of uncollected bills, unfortunately, is widespread. One report showed that 68 percent of patients in 2016 failed to pay off medical bill balances, which is up 49 percent from 2014. The survey also found that nearly half of Americans reported they would be unable to pay for an unexpected medical bill of $100 or more without going into debt.
A practice can quickly sink large amounts of employee time working to collect debt. These are resources that could otherwise be used to invest in new equipment, technology or other office improvements. The lost opportunity cost can weigh down the business and its potential to thrive in the future. Getting this function out of the practice and into the hands of a customer-focused business partner is key to building a practice that can thrive.
The Role of Increasing Patient Satisfaction
Customized patient payment and financing options allow practices to quickly improve patient satisfaction and build more meaningful relationships with patients. There are many benefits to improving the patient experience, some of which affect the bottom line. One survey found that a positive patient experience resulted in the following:
- Lower medical malpractice risk. The study found that when patient satisfaction report scores dropped, the risk for malpractice suits increased.
- Greater employee satisfaction. Studies have found there is a direct correlation between highly satisfied caregivers and satisfied patients – which in turn helps recruitment and retention of doctors, nurses and others working in healthcare offices.
- Less likelihood of patient turnover. Creating a positive patient experience in many areas, including the payment aspect of care, results in long-term patient relationships. The survey found that patients who reported poor quality of care were three times more likely to switch doctors than were those who reported good relationships with their doctors.
Patients want to feel truly known by their doctors, and one aspect of this need is the payment experience. Practices can increase collection rates by using patient payment methods that enhance, rather than diminish, the patient experience.
Boosting Collections Through The Right Methods
Practices have more options than ever for collecting payments. Offering patients many different ways to pay for service can increase satisfaction rates. According to a recent report, practices can boost payment collections and reduce receivables by taking just a few actions, including:
Offering online payments. Most patients prefer to pay medical bills online; however, less than half of practices surveyed offer online payment options. Give people the ability to pay balances online instead of by postal mail or going through the time-consuming process of calling the office or visiting in person.
Providing a “card on file” option. People have gravitated to a “card on file” approach to doing business. They have memberships, service providers and shopping relationships that allow them to make payments with a few easy clicks, without ever digging out a credit card. As a result, they expect the same from all service providers, including their doctor. The study found that one practice implemented a card on file program and reduced accounts receivables by 28 percent in six short months.
Providing payment plan options. Practices might be surprised to learn that patients of all income brackets enjoy the option of financing medical balances. The study found that patients with incomes exceeding $75,000 use payment plans more frequently than do those who earn less. Personalized payment options allow patients to create a plan that works for their situation.
Select technology that promotes seamless patient communication. People want better communication with their healthcare providers – including in the area of payments. In the survey, poor communication was listed as a top reason for patient turnover. The survey further concluded that patient turnover and bad debt are directly related. Patient payment options that include clear communication and personalization can help decrease bad debt.
Ability to pay with mobile payments. Many patients prefer mobile payment options. In fact, 29 percent of U.S. consumers would like to pay with their cell phone all the time. Mobile payments provide ease of use. Practices can send a customized text or email message that gives patients the option to pay now or to enroll in a facility-approved payment plan.
Simplified experiences. Automated settlement allows patients to safely store payment account information to pay balances owed after insurance adjustment. Payment accounts are tokenized and stored in an encrypted payment vault.
The Benefits of Patient Financing to Your Patients
Practices already know that patients need financing options, and by providing a solution that offloads that risk to a trusted partner, they can successfully help patients do the following:
Reduce delays for treatment. Patients who have access to flexible and affordable payment options don’t have to worry about how they will pay for patient-centered care. This encourages people to get the affordable care they need sooner and mitigates the risks of delayed care.
Manage out-of-pocket costs more easily. People are paying more for healthcare, and this increase in payments is a concern. Setting up an affordable payment plan lets patients know they have options to finance treatments. As a result, this builds patient loyalty and fosters a positive relationship with your practice.
The future of patient care is rooted heavily in experience. How can you improve that experience while safeguarding your practice and ensuring that it will thrive? In addition to better serving patients, providing flexible payment options delivers many benefits to the practice.
Benefits of Patient Financing to Your Practice
Doctors are committed to serving their patients and providing the highest level of care. As a result, they are constantly looking for innovative ways to improve the experience while ensuring the practice remains financially stable and healthy. Patient financing provides many benefits to the practice, including:
Better use of employee time. Partnering with a financing provider allows you to offload the risk of collecting payments and frees up valuable employee time.
Improved cash flow. Cash flow is the lifeblood of your business. A practice that is challenged with cash flow can quickly experience a variety of serious issues. A payment and billing technology partner allows you to offload a time-consuming task, mitigate risk and focus more on the patients.
Decreased risk of bad debt. Practices that have gotten into the business of providing “loans” to patients are putting themselves at risk for bad debt. By outsourcing this function to a partner that is committed to providing strong service, you can improve the patient experience without taking on financial risk.
The need for affordable payment solutions will only grow in the future as more people pick up a larger portion of their healthcare costs. Practices that provide flexible and affordable payment solutions are positioned to build strong businesses and create experiences that solidify relationships and build referrals and trust. By doing this, you position your practice to thrive and grow into the future, which allows you to reach more patients and provide higher quality care.