Sponsored by CarePayment

Revenue cycle leaders who seek to add messaging about financial services into hospital marketing materials will have a positive impact on patient payments and patient satisfaction.

Four compelling trends should prompt hospitals and health systems to expand their marketing focus to include patient financial services. While doing so may start as a defensive play to stay competitive, revenue cycle leaders will find that showcasing their financial services is one of the surest ways to increase patient collections, reduce bad debt, and improve patient satisfaction and loyalty.

Why Market Hospital Financial Services?

These trends point to the important role of financial services in retaining patients and maintaining strong revenue cycle operations.

The patient is emerging as a real consumer motivated by cost and convenience. A recent PwC survey of 1,000 consumers found 64 percent were open to nontraditional ways of seeking medical attention if the price was right and another 16 percent were open regardless of price.

Hospitals and health systems are facing more competition from retailers who know how to market to consumers. Formidable new entrants in the healthcare market are popping up within established retail settings, embedded within pharmacies and big box retailers, and opening shops in strip malls and urban shopping centers. These consumer-savvy providers know what consumers want: predictable pricing, extended hours, and tech-enabled conveniences such as online scheduling and mobile payments. One pharmacy clinic just reached a milestone of 25 million visits.

Major cost shifts currently underway are requiring individuals with health insurance to pay substantially more of their medical bills. As a result, healthcare consumers are looking for a more retail-like experience, including a wider range of patient financial services. In particular, they want help in understanding and managing their financial obligations and options, especially before incurring costs for any care.

The healthcare affordability crisis is squeezing the working class and middle class who are the backbone of the U.S. health system. It isn't only the poor, uninsured, or unemployed who struggle to pay for care anymore, according to new research from the Commonwealth Fund and Milliman Medical Index Report:

  • A typical American family of four will pay $10,473 for an average employer-sponsored PPO in 2015, $6,408 through payroll deductions and $4,065 in out-of-pocket expenses-and high-deductible plans from employers or purchased privately can cost people even more.
  • Approximately 31 million adults in 2014 were underinsured, which the Commonwealth Fund defines as having out-of-pocket health costs, excluding premiums, of 10 percent or more of household income or a deductible of 5 percent or more of household income.
  • Nearly three out of every five underinsured adults, or 59 percent, are covered by an employer-sponsored health plan.
  • Forty-four percent of underinsured people skipped needed care because of cost.

With health care increasingly becoming a major purchase for families at nearly every economic level, hospitals and health systems will need to treat it as such. From the growing number of state laws requiring hospitals to publicly post prices to the IRS 501(r) regulations governing financial assistance programs, it's no longer enough to wait until a patient asks about pricing, payment plans, or other financial information. Hospitals and health systems need to make patient financial services a centerpiece of their community outreach and their retail strategy.

The Impact of Patient Financial Engagement

Marketing financial services doesn't require a stand-alone campaign. It could be as simple as incorporating messaging about cost estimations, financial counselors, and payment programs into current or future marketing. Including this information shows that hospitals' commitments to community well-being extend to patients' financial health. It also drives improved financial performance in the following ways:

Patient financial engagement leads to clinical engagement. You cannot engage patients clinically if they forgo care or wait until emergencies occur to seek care because of cost. This undercuts efforts to improve health outcomes and lower costs and jeopardizes value-based reimbursements. However, once patients know they have financial options, they can focus on treatment and recovery.

Consistent communication about up-front financial services sharply increases propensity to pay. Hospitals recover a small percentage of unpaid balances if patients walk out the door without agreeing to payment methods. However, when financial discussions at the point of service include payment plan options, recovery rates skyrocket. In fact, some hospitals report bad debt reductions of as much as 76 percent when they present financing programs up front.

A Marketing Focus on Financial Services

When it comes to healthcare marketing, hospitals and health systems traditionally have focused on promoting clinical expertise and rankings on "best" lists. They should add financial services to their outreach efforts. As consumers increasingly shop for medical care, they are choosing healthcare providers at least in part on how they handle patient financial matters.

Huntley McNabb is vice president of marketing, CarePayment, Lake Oswego, Ore., and is a member of HFMA's Oregon Chapter.

Publication Date: Wednesday, July 01, 2015