10 Ways to Enhance the Patient Payment Experience
Strategic process changes can help healthcare organizations increase patient payments.
Patients represent the fastest growing payment source for healthcare providers. This trend clearly presents significant challenges for health systems, particularly in collecting full payment for services delivered. But it also brings opportunities for health systems that rethink their strategies for managing patient payments.
As the payer landscape shifts from insurers to patients, the financial focus of providers should shift from the mindset of cost containment to one of maximizing the dollars flowing into the healthcare system today and ensuring more visits from loyal patients tomorrow.
The opportunity cost of not adapting to a patient-centric model is far too great to ignore.
However, by developing a patient payment engine focused on driving patient loyalty and generating more payments, healthcare executives can bring meaningful operating margin to their organizations.
10 Patient-Focused Innovations
As finance leaders rethink their organizations’ approaches to supporting patients as payers and consumers, they should consider 10 innovative steps and processes that help their organizations become industry leaders in this area.
Offer mobile-first online payment platforms. More than 50 percent of healthcare consumers expect more online interactions with healthcare providers, including bill payment. a Patients want intuitive, mobile-friendly payment options that offer helpful functionalities, like the ability to review past statements and store payment methods.
About one-third of all patient payments are made through online or mobile payment platforms, and more than a quarter (27 percent) of all patient payments are made when the business office is closed. b
Mobile-first platforms also can expedite the payment process. Text messages have an extremely high open rate—around 98 percent. c Sending patients text messages that lead directly to their bills can help a health system capture payments faster. In fact, one healthcare organization that tested its very first text message payment reminder found the bill paid in just eight minutes.
Collect email addresses and phone numbers like a retail business. The shift toward healthcare consumerism presents healthcare organizations with the opportunity to emulate successful business-to-consumer (B2C) practices. Just as in retail businesses, the healthcare payment process offers an opportune time to collect email addresses and mobile numbers for use in helping patients make future payments and in engaging them digitally. Healthcare organizations should be sure to obtain patient consent to be contacted digitally for payment notifications.
Communicate with patients based on their expressed preferences. Healthcare organizations take great care to clinically treat each patient as an individual. The same must be true from a financial standpoint. Some patients may prefer to receive text messages, and others may prefer mailed statements.
In a survey conducted in June 2017 by an independent research organization, 90 percent of respondents said they felt they should have the right to choose how they receive financial communications. d By offering patients their choice of communication methods, a healthcare organization can improve patients’ overall experience and satisfaction.
Adapt communications to patients based on their actual behavior. There is an important distinction between patients’ expressed preferences and their actual behavior when it comes to making payments. Although it’s important to communicate with patients based on their expressed preference, as indicated above, it’s perhaps even more important to follow up based on their behavior.
For example, patients who opt to receive bills via email, but don’t open emails, should be transitioned back to paper bills. Research has shown that this step may be necessary: Although many patients expect an online billing option, one Mailchimp study found that 77.5 percent of all healthcare emails sent are never opened. e To improve both patient satisfaction and payment rates, healthcare organizations must not only offer options but also diligently track real-world behaviors. In some instances, paperless bills could even suppress patient payments.
Consider this example: In 12 months, one health system realized more than $3 million in additional payments by switching patients who did not engage with emailed bills back to mailed statements. The patients whose payments were part of that $3 million sum paid only after receiving a mailed statement, even though they had originally expressed a preference to receive bills via email. Smarter paperless billing incorporates patient engagement tracking to automatically monitor behavior and tailor the financial experience accordingly.
Optimize outreach timing based on historic open rates and user behavior. To speed payments, healthcare organizations should send bills and reminders during optimal time periods. The Mailchimp study referenced above found that most B2C email open rates hover around 20 percent, but by tracking patient behaviors and responding accordingly—such as deploying messages on days of the week or at times of day when patients are most likely to interact and respond—a healthcare organization can raise its open rates. When an organization knows who is most likely to respond at night versus during lunch time, for example, it can more easily customize the payment experience and optimize communication timing. Timing can influence other communication methods as well, such as mobile messaging. Marketing experts have observed that people are less likely to respond to a text message on Mondays than other days of the week, for example. f
Offer flexible payment options to meet patients’ needs. Many people defer healthcare payments, or avoid care altogether, because of high deductibles and out-of-pocket expenses. Flexible payment options could encourage these people to seek health care and make their payments.
Depending on a patient’s financial situation, a healthcare organization can offer the options to either minimize interest expense or minimize monthly payment amounts. Some patients may prefer to pay their bills in a few monthly installments. By allowing patients to securely store credit cards on file and choose automatically recurring payment dates, a health system can provide a financial experience that is easy for patients and results in increased revenue. For patients with larger bill balances, longer-term financing options may be the best option.
When evaluating the patient payment experience, healthcare organizations also should consider the enrollment process itself. To increase patient adoption of their organizations, healthcare finance leaders should look for ways to streamline the process and support self-enrollment in financing plans. For example, patients can be provided with a short, simple online questionnaire that allows them to opt in for financing should they want or need it.
Maintain payment consistency across the entire health system. Inconsistently designed billing statements with differing payment methods often confuse and frustrate patients, especially when those statements come from different entities for the same episode of care. Instead, consistent payment processes can improve patients’ satisfaction levels and provide them with a cohesive brand experience as they follow their care paths across various providers and services.
Payment consistency also has operational benefits. When a health system is financially aligned, payment status can be more closely monitored. Various departments and even separate facilities can flag and collect outstanding balances from previous patient interactions.
Create an intuitive staff and user experience. Patients have high expectations for the type of user experience organizations provide, thanks to their other encounters with forward-thinking companies such as Amazon or Netflix. As consumer-facing businesses continue to invest substantial capital into improving the user experience, consumers will become even more discerning. A healthcare organization that has a design-driven payment process can both safeguard its patients’ user experience and accelerate patient payments.
Indeed, customers’ willingness to pay for a product increases by 14.4 percent based on their experience. g Attention spans are low, and averseness to friction is high. If the payment process is not easy and user friendly, patients will move on.
Internally, an intuitive process helps to improve staff productivity. With automated prompts throughout the process, staff can easily guide patients who need assistance making their payments.
Incentivize staff engagement based on real-time payment data. Patient collections begin with staff. Thanks to more data insights, organizations can create performance-based incentives to help drive better collection rates.
Using real-time data, healthcare organizations might want to consider “gamifying” the collections process for staff. For example, a digital leaderboard can help staff see at a glance who is collecting the most payments and who is signing up the most patients for payment plans. Leaders can boost morale by creating a friendly competition between departments or shifts, rather than having individuals compete and possibly creating bad feelings.
Structured incentive programs based on the right activities will improve staff behaviors to increase collections. With up-to-date data, the organization can adjust the reporting by patient volume and see how teams are faring each day.
Real-time digital leaderboards also give organizations insights down to the user level. If an employee has a low collection rate, he or she may require additional training or assistance.
Analyze historic patient payment data to inform future decisions and strategies. Financial leaders should use data and analytics not only to benchmark success, but also to identify areas for improvement. This is where machine learning lives up to its hype.
There are always opportunities to optimize patient payments. Data generated from machine learning can tell an organization how to do so. Machine learning creates insights by running multiple experiments on a large scale, and based on the outcomes of those experiments, it will fine-tune the processes within an organization’s revenue cycle to improve patient payments.
Even the smallest changes can lead to a big difference in patient revenue. For example, an organization might consider the location of the payment button in email reminders, and whether it is more effective to place the button at the top of the email versus at the bottom. And regarding the text itself, machine learning can help an organization determine whether “Pay Now” or “View My Bill” produces better results. By conducting such micro-experiments, machine learning can identify which changes have the greatest effect on patient behaviors. Healthcare organizations should continually test and adjust for the best results.
Patient-Centric Billing Design
With higher deductibles and out-of-pocket expenses, patients are taking on a bigger percentage of healthcare payments. Health systems need to model their payment strategies around the patient to increase collections and enhance their patients’ financial experience.
Hospitals and health systems can add significant operating margin and reduce long accounts receivable cycles by making the payment process easier and more patient friendly. By shifting their perspective from cost containment to increased patient payments with a focus on enhancing the patient experience, healthcare organizations can strengthen both their bottom line and patient loyalty.
Bird Blitch is CEO and cofounder, Patientco, based in Atlanta.
a. Collier, M., and Basham, L., Fit for Tomorrow: As Healthcare Consumers Become More Digitally Intense, Providers Need to Raise Their Game , Accenture, 2016.
b. These statistics are based on results of internal research by Patientco.
c. Jeffries, J., “Email Marketing vs. SMS Marketing: The Stats,” business2community.com, Feb. 26, 2018.
d. Two Sides, Print and Paper in a Digital World , May 16, 2018.
e. Mailchimp, “Average Email Campaign Stats of Mailchimp Customers by Industry,” March 2018.
f. Kunzi, T., “When Is the Best Time to Send a Text Message?” Mobile Marketer, 2019.
g. Rossi, B., “The Business of User Experience: How Good UX Directly Impacts on Company Performance,” Information Age, Feb. 17, 2016.