Healthcare providers debate ways to offer patients manageable payment options

The one thing that patients say would make care experiences more satisfactory is advice on how to best pay for their share of services or procedures not covered by insurance or otherwise. 

“Consumers fear the pinch of high healthcare costs and their ability to pay for them — and this fear prevents many from seeking care,” according to the HFMA report Curing Payment Confusion. “In 2022, nearly four out of 10 people said they had delayed needed care for themselves or a family member due to cost concerns, up from 26% the year before, according to a Gallup Poll,” the report stated.¹

Healthcare providers, on the other hand, believe they are doing a great job of addressing any payment option confusion, and many don’t understand why the confusion exists. According to the same HFMA report, nearly 83% of healthcare finance and revenue cycle leaders surveyed believe their organization does a good job of explaining financial matters to patients.

Considering this disconnect, healthcare finance leaders today are faced with a critical challenge: how to more effectively offer patients manageable payment options without tying up hospital cash flow or overwhelming staff.

Several healthcare finance executives discussed their work in improving the patient financial experience and the growing role of patient financing in a roundtable titled, “The Financing Factor: How healthcare providers are balancing healthcare affordability and revenue integrity.” Here are their top insights.

What are your experiences with patient financing?

Gregory Arnold: Let me share our experience with integrating financing using Epic, aiming to keep patients within our system.

I oversee the revenue cycle for Endeavor Health, which is the combination of North Shore University HealthSystem, Edward-Elmhurst Health and Northwestern Community Healthcare [in Illinois]. We’ve been together for three years under the new name. Endeavor sought to bring three systems together, each of which did things differently.

Endeavor Health now offers payment plans for up to 12 months, with a fee to cover interest. We encourage patients to quickly pay off their balances. We don’t want them to have a balance that runs for two or three years. The new system has so far been a very good thing. Initial results show that we’ve seen about a 10% increase in yield in some of our previous plans, and I think we have about a 25% acceptance rate of people using the system.

Ian Jensen: I’m the senior director of central patient access services at Banner Health. I’ve been in my role for about four years now. Our financing system was more born out of necessity. Prior to working with the patient financing vendor that we’re with now as well as a payment vendor, our collection module was very rigorous. We had to do a couple of different things [to improve the patient financial experience]. We now have an internal financing plan where we’re offering 24-month and 12-month payment plans, and we’ve partnered with our vendors for additional financing options.

What are the challenges and benefits of patient financing?

Jensen: Something that was a big consideration for us is how to ensure that we’re getting dollars

upfront now, especially in a non-recourse plan, to help with patient financing. We wanted an option where patients could go to any Banner location — urgent care, surgical center, whatever it was — and use those funds.

What we have now is a system where patients who are not assigned to a bed will work with a vendor to make certain their financing is put in place. There are caps to it. That is one of the downsides to this approach. And it doesn’t cover all surgeries. But it does take care of about 80% of the volume that we’re looking for. The benefits are improved patient financing, improved patient experiences and reduced bad debt.

David Lombardi: I am the CFO for Cecilia Health in New York. We are a virtual specialty medical practice focused on integrated cardiometabolic care, and we work with pharmacy benefit managers and insurers. We are not a hospital system, but we face a different version of the same challenge. The industry must determine how to keep patients engaged without encountering financial barriers that would cause them to walk away from care.

My group is in the throes of building out a full revenue cycle management [system] as we begin to expand into our next quarter’s market strategy. Patient financing is a key pillar to that plan. We’re evaluating partners that can potentially help us do installment options with minimal friction. What we don’t want to do is compromise cash flow. So the challenge here is finding a solution that integrates [with our system] and that supports us as we grow.

I think patient financing is going to shift from a nice-to-have option to a core infrastructure layer within healthcare. Providers will need tools that enable them to offer compassionate, flexible financing without burdening their staff and without sacrificing predictable revenue.

Arnold: With patients owing more, I think we’re going to have to focus more on self-pay collections, because it feels like more responsibility is falling on the patient. Right now, I’m having to collect a lot more from my patient population than I ever did before. We’ve had success with increased yield and acceptance rates through the financing model. I’m trying to think of what will make [payment] most convenient for them.

Would you please discuss your integration and reconciliation challenges?

Jensen: One of the reasons why we went with both an internal and external solution was due to the spread of facilities we have. Based in Phoenix, Banner Health has 30 locations spread across Arizona, Colorado, California, Nebraska, Nevada and Wyoming. Not every facility was able to maintain their accounts receivable as needed.

There is a need for accurate estimates to build patient trust and avoid overestimating charges. Some, such as our Banner gateway facility, were able to maintain a 4% to 5% rate without the financing options. But some in our more rural areas needed help in this area. So, to provide a standardized experience, we made it universal for everyone.

The move did end up pushing down accounts receivable and increasing upfront cash. We watched upfront cash increase overall just with the financing option — between $13 million to $19 million per month.

Craig Nesta: I’m vice president for Emerson Health and COO for Emerson Practice Associates (EPA) in Concord, Massachusetts. EPA is a multi-disciplinary physician practice including primary care, medical and surgical sub-specialties, urgent care, anesthesia and inpatient medicine.

Emerson Health is deeply rooted in the community and patient experience is a priority. An issue that I heard come up during this roundtable is patient experience and how it relates to collecting patients’ outstanding balances. To optimize the patient experience regarding revenue cycle issues and patient balances, it is vital as an industry that patients have education on patient deductibles, co-insurance, balances, and more, as this is a key element to the overall patient experience. 

What does an integrated financing solution that could work with EHR systems like Epic look like?

John Talaga: We’ve worked with several large customers over the past five-plus years, specifically talking about how they want to deliver a positive financing experience to patients. Many weren’t satisfied with what you might consider the traditional ways of doing that. I mean, providing a link, sending a request out to a third party and then essentially getting a loan from a third party, which you would create terms with, and having patients sign up for a plan there wasn’t an optimal solution, in their view.

Instead, clients want to have a fully integrated experience, where that financing trigger could live inside the experience where patients would otherwise make a payment or would set up a provider-based plan. Not everything should be financed. It gets too expensive, and it’s unnecessary. So we’ve worked with clients on delivering models that offer greater flexibility.

What future investments do you expect in patient financing?

Lombardi: In the future, I don’t see these types of payment options as nice-to-haves, but as must-haves. Whether it’s due to economic uncertainty, inflation, pricing pressure or co-pays, at the end of the day, the burden is going to be placed onto the consumer. I predict the industry will invest more in patient financing as part of the revenue cycle management strategy, offering flexible payment options and alleviating staff burden.

Sheldon Pink:  I am the vice president of the central business office at Methodist Health System in Dallas. One of the things that Methodist does very well is their pre-collections. That’s probably the strongest I’ve seen in many other health systems. They’re collecting anywhere between 3% and 4% upfront. Most of the patient responsibility is identified upfront.

Our community hospital will never adopt the strategy of not seeing a patient over payment issues, because our reputation in the community is more important than the dollar and cents of whatever the co-pay is. We focus on improving the patient financial experience, education, accuracy and flexibility in our financial model.

We try everything in our power to communicate to patients: “Hey, can we put you on a payment plan?  Can we do this? Here’s what you’re going to owe.” We do everything in our power, but I don’t think healthcare would ever get to the point where we stopped seeing patients that we do now.

Jensen: We emphasize self-enrollment and self-service options for patients to access financing and payment plans. That has actually increased our patient experience scores. That was one of the chief complaints we were getting: that patients were not allowed to search by surgery or whatever it was. We were turning them away. And it was being seen as predatory, especially as we move into new communities in Wyoming or southern Arizona.

Offering a financing option actually helped to improve our patient experience scores. We stopped getting patient complaints regarding the [financing] or the lack of financing. This actually ended up being a perk for us by saying, “Hey, we did have the payment plans already, but here’s another option if you don’t want to work with our internal team.” We were able to sell it as, “This may be even better for you than what we can offer internally.”

Ryan Klein: I am the senior director patient access and financial experience at UW Health [University of Wisconsin] in Madison, and I agree with the importance of self-service and integrated patient financial options. With the growth of high-deductible plans and increased patient liability, the industry needs to be more consumer centric and provide patients with payment options.

UWHealth allows patients to create payment plans prior to the date of service when an estimate is proactively provided; however, we always ask for payment in full first. Although we would like patients to proactively create payment plans, pre-service payment plan adoption has not taken off as we had hoped, but we will continue to offer this to patients with expected out-of-pocket costs.

Conclusion

Participants in the roundtable stressed the importance of integrated financing solutions within EHR systems such as Epic, the need for non-recourse financing to improve the patient experience and reduce bad debt, and the potential for self-service patient financing options.

The conversation also emphasized the need for accurate patient estimates and the potential for patient financing to become a core infrastructure layer in healthcare.

Several action items were also suggested for organizations seeking to take a proactive approach to patient payment. They included:

• Evaluating the cost and benefits of honoring patient estimates and the potential risks involved
• Exploring opportunities to increase self-service patient financing options, such as allowing patients to enroll in payment plans or apply for financial assistance through online portals
• Assessing the projected increase in self-pay accounts receivable over the next three to five years and developing strategies to meet the growing demand for patient financial options

Panelists

GREGORY ARNOLD
is a senior vice president, revenue cycle with Endeavor Health in Chicago

IAN JENSEN
MHA, CHAM, is senior director with central patient access services at Banner Health in Phoenix

RYAN KLEIN
is senior director, patient access and financial experience with UW Health in Madison, Wis.

DAVID LOMBARDI
is CFO with Cecelia Health in New York

CRAIG NESTA
JD, FHFMA, MBA, is vice president with Emerson Health, and COO at Emerson Practice Associates in Concord, Mass.

SHELDON PINK
FHFMA, MBA, LSSBB, is vice president, central billing office, with Methodist Health System in Dallas

JOHN TALAGA
is executive vice president and general manager of healthcare at Flywire in Boston

CHARLOTTE VIGIL
moderator, is senior consultant at Eliciting Insights in St. Louis

About Flywire

Flywire simplifies payment processing, capturing payments more efficiently, cutting excessive transaction fees, and optimizing the financial health of your healthcare system. Our responsive billing and payments platform leverages deep analytics and machine learning to understand your patients capacity to pay, their preferred method of engagement, and where on their healthcare journey we need to meet them. We’re delivering on your patients most important payments and maximizing collections for you and financial peace for your patients.

Footnotes

[1] Williams, J., “Curing patient confusion,” hfm, May 24, 2024.