As patients are held financially responsible for larger portions of their healthcare bills, they are seeking greater transparency about the cost of care so they can shop around for services, plan for elective procedures, and budget appropriately. This increased patient scrutiny has caused healthcare organizations to rethink aspects of their revenue cycles, especially regarding pricing and cost estimation. In this roundtable, sponsored by Change Healthcare, several financial leaders discuss consumerism’s effect on their revenue cycles and how they are responding to this growing trend.
The industry has been witnessing the rise of consumerism for several years; how prevalent is it in your market?
Sarah Knodel: It is a prevailing theme in many of the markets and communities that Baylor Scott & White Health serves—especially in the Dallas-Fort Worth Metroplex and the Austin-Round Rock region. Patients in these areas are shopping around, trying to understand what their out-of-pocket costs are going to be for specific services. Ultimately, they are looking for high-quality care at a reasonable cost. Beyond price shoppers, however, there are also patients who have already scheduled a service with us and want to better understand their out-of-pocket costs prior to care and what options they have to satisfy the amount due.
Barbara Tapscott: Geisinger covers a diverse geographic footprint in Pennsylvania and New Jersey. Our experience with consumerism varies by market, but the ones that are seeing the most growth in customer involvement are where employers and insurance companies are putting more cost responsibility into consumers’ hands, such as through high-deductible health plans. In these markets, patients are seeking estimates for services and engaging in comparative price-shopping.
Insurance companies that are creating narrow networks are also driving consumerism, and a savvy customer will know exactly what the limitations and benefits of their network are. These patients will certainly inquire about pricing and want to make informed decisions about their financial outlays.
Eric Krepfle: Today’s patients often come from the “Yelp” generation. More and more, they’re searching for the best price and want recommendations for the services they plan to have. After housing costs, one of the biggest items in many patients’ budgets is their health care. So, it’s not surprising that they are concerned about getting the best value for their dollar. They pay attention to things like quality scores, waiting room times, scheduling convenience, flexible hours, a self-service portal, and so on. They also want up-front cost details and to have their benefits fully explained.
How are you currently managing inquiries about treatment costs?
Amy Beal: At Baton Rouge Medical Center, we have two primary means of addressing incoming patient queries about estimated costs. First, we offer telephone access where a financial counselor can be reached 12 hours a day. These counselors walk potential patients through their options, providing cost estimates in real time. We also facilitate these estimates on our website where people can enter key information and receive an approximation of care costs. Note that all patients who are scheduled for events within our hospital receive an estimate prior to service, whether or not they ask for the information.
Knodel: Our guiding principle is to provide an estimate to every patient in every setting. For our scheduled patients, we provide estimates in advance of care. Our dedicated pre-registration department proactively calls patients to review their insurance benefits with them and inform them of their out-of-pocket costs. In our walk-in settings, whether it’s the emergency department or if somebody comes in for a walk-in lab appointment, we are also providing estimates at the point of care.
For those patients who may not have a relationship with us but are considered price shoppers, we have several ways they can determine whether they want to schedule their service at Baylor Scott & White Health. First, they can go to our website where we have a self-service price-estimation tool. Using this resource—which includes our pricing, contracted rates, and pulls back real-time eligibility and benefit information about the patient—they can produce an estimate in a matter of seconds. We also have a price estimation hotline where patients can call our team and receive a quote over the phone. Individuals also have the ability to send an estimate request through our website, and we turn that around in 24 hours. We are in the process of adding chat functionalities to our price estimation website as another option for our patients to engage with us.
Richard Madison: St. Luke’s University Health took a somewhat out-of-the-box approach to price shoppers by developing a Price Checker program. Basically, we identified items for which people were shopping—imaging services, screening services, and some outpatient procedures, for example—and came up with a pricing structure in which we bundled professional and hospital costs together and offered the service/procedure at a fairly discounted rate. To take advantage of this price, patients must pay the pre-determined amount in advance. For these procedures, we don’t have to create insurance claims or send patient statements. It’s all done directly with one price for the patient.
To determine which procedures warranted inclusion in the program, we went to physicians and hospital departments and asked, “What diagnostic services are patients asking about and shopping for?” We also did some secret shopping.
Initially, we created the program for self-pay patients. More recently, we decided to extend it to individuals with high deductibles. We’ve started to accept insurance as the primary coverage, but the patient still has to pay the fee up front. For example, if a patient has a $5,000 deductible and wants a screening colonoscopy, we might typically charge $2,500. We would submit the bill to insurance, but the patient would pay the $2,500 out of pocket because he or she has a $5,000 deductible. However, our Price Checker fee for a colonoscopy is $1,050, and we accept this payment from the patient as payment in full. This program can be doubly convenient for insured patients. They get the benefit of bringing down their $5,000 deductibles but we cap their out-of-pocket expenses. People know exactly what they are paying, and it can ease any anxiety associated with the cost of care.
To participate in the Price Checker program, patients must talk with one of our financial navigators, who will not only go over the program but also walk the patient through their other options. These professionals start by sharing the Price Checker price and then they look to see whether it makes more sense for the patient to use insurance—depending on his or her co-pay or deductible. About 40 percent of the calls to financial advisers result in patients using the Price Checker program. For the rest, either we’ve determined that it would be cheaper for patients to use insurance, or they are eligible for financial assistance. If it’s the latter, we will start that application process for them.
Right now, we are soft-marketing this opportunity. Physicians have brochures in their offices that they share with patients that point them to the website. The brochures cover how to get into the program, whom to connect with, and what is available. The program has grown simply through word of mouth—our volumes for inquiries have increased by 173 percent in the past year. That’s not to say that we are flooded with calls. In 2016, we had about 85 calls per month, and now we average around 230.
What are the risks of being more transparent? What are the benefits?
Madison: One of the risks for us is if patients aren’t aware of our Price Checker program, they may pay more for a service than their neighbor or friend who did take advantage of the program. This can be especially frustrating if the patient has the same insurance as his or her neighbor.
The benefits are that the health system is getting paid in advance and does not have to generate claims. The hospital processes the payment and cuts a check to the physician office for their portion, which was previously negotiated. Patients are happy because they have clarity around what they’re paying. They know they are not going to receive bills after the fact.
Tapscott: I would say the biggest risk to sharing cost information comes when a provider doesn’t have the infrastructure to educate the public about what the financial information means. If there aren’t resources to help patients interpret the information and determine their financial outlays, then sharing more detail could cause more harm than good. So, if an organization merely publishes its prices with no context, that could be quite damaging. However, if it generates estimates and has a robust education program supporting them, patients and the organization can benefit. If people understand their costs, they are more likely to accept responsibility and pay their bills. Patients will be more informed consumers, and the organization can recognize earlier whether individuals can pay their bills, allowing the organization to proactively set up payment plans, offer financial assistance, and so on.
Krepfle: Providing estimates can be an effective way to be more open. However, there is a danger in setting a false expectation about costs, particularly with a self-service estimation tool. If the provider is going to put an “average” price out there for the public (and also for their competitors to see), then they have to have some strong and evident disclaimers. These estimates should be just that—estimates—and in many cases, should serve as a starting point for further discussion about a patient’s liability.
Madison: Even though estimates may not be 100 percent accurate, they are still worth giving to patients. If they don’t receive one, they may perceive that a service is too expensive and may not get the test or procedure done. Down the road, they could become a much sicker patient. At that point, the chances of high-quality outcomes go down and the costs for care go up.
Beal: At Baton Rouge Medical Center, we’ve been doing estimates since 2012, and our patients and community have come to expect it— it’s the norm. By offering these approximations, we’ve increased our up-front cash collections and have been able to set up payment plans in advance instead of after the fact—lowering our patient A/R and bad debt. We also can educate patients in advance about their responsibilities. For instance, let’s say a patient can’t afford a test. By providing an estimate, we give him or her more time to get his or her financials together. If it’s not something that’s absolutely necessary, then the patient has the choice about whether to proceed. Even if the individual can afford the procedure, but it will be a stretch, he or she can set up a payment plan. This is a much better scenario than having the patient come in for the procedure, realize he or she can’t afford it, and then not pay on the back end.
How do you know you are providing accurate estimates across the board?
Krepfle: There are multiple process improvements to consider when assessing estimate accuracy. One involves figuring out whether your patient estimation tool or methodology is precise and comprehensive. The other entails assessing whether patient access staff are choosing the correct procedures during the estimation process based on the information supplied by the clinician.
Knodel: We have a formal accuracy reconciliation process where we combine our claims and electronic remittance advice data and compare them to our estimates. Every quarter, our price estimation accuracy work group reviews what was scheduled, estimated, and billed in comparison to what the patient actually owed. In viewing the data from these vantage points, we’re able to clearly see whether what we estimated was close to what the patient owed. If it’s off, we look closer at why. Was it because what was scheduled was different than what was performed? Was it because we had a contract rate loaded incorrectly in our price estimation tool? Or, was it simply because the patient’s benefits had changed from the time that we estimated the out-of-pockets costs to when the claim actually adjudicated? If we identify systemic issues, then we work to address them so we can continue to refine our accuracy.
How do you explain to patients the concept of an estimate versus a guaranteed price?
Knodel: I think most patients understand that an estimate is not a guarantee, and we verbally articulate that to them and include a written disclaimer on our one-page estimate form. However, I think there’s still an expectation from our patients that the estimate will be reasonably close to what they’re going to be billed post-discharge. If an approximation is within the realm of reasonableness, then patients are typically comfortable with that. They tend to accept that there are complications that arise and there are reasons why the estimate could be different. They’re probably less forgiving when things are significantly off. In those instances, we try to determine why there are discrepancies and work with the patient to come up with a reasonable resolution.
Are you using HFMA’s patient financial communication (PFC) best practices? If yes, in what ways do you find them valuable?
Tapscott: We certainly use them, and they are valuable in that they offer best practice standards. Geisinger is a large organization with several hospitals and clinics. I have patient access personnel and financial counselors throughout a wide geographic area who interact with the public. We want them to deliver a consistent message to patients. As such, we need to give them the right tools to communicate that message in the most sensitive—yet standardized—way possible. HFMA offers guidance and sets the standard for consistency in communication. We also audit our patient financial communications once a year to figure out what we could be doing better. So, our communications are always evolving and improving.
Knodel: Through our revenue cycle training and development department, we have curriculum that we include in our new employee orientation and annual refresher trainings that covers everything that goes into a financial conversation with a patient. The education touches on point-of-service collections, our financial assistance policy, and our payment plan and interest-free loan programs. We provide in-person training, access to web-based tools, and role-playing exercises to help our staff truly learn how to overcome different objections and concerns that they may hear from patients. Some of the content is guided by the HFMA PFC best practices, and then some is based on our own insights and experience.
Beal: We use some of HFMA’s PFC best practices as a starting point, modifying them when necessary to fit with our front-end processes. We offer quarterly training where we provide hospital-wide education. A blast email will go out to all departments, and staff can sign up for a class during a three-to-five-day period. These trainings are designed to ensure that everyone in the organization delivers the same financial messages no matter how a patient accesses our facility.
How are you using data and analytics to identify areas where your front-end revenue cycle processes could be breaking down and affecting patients?
Knodel: We look at total point-of-service collections by our different areas, which is helpful. Even more important, we examine how many patients we’re having financial conversations with by service line and department. Our expectation is that we are talking to at least 95 percent of the patients who walk through our doors. We also review the total estimated amounts for a given day and for a given service and compare the total calculated patient responsibility versus what we collected. Although reviewing summary-level data by facility and department is helpful, we also assess trends at the representative level so we can spot trends and the need for more focused training.
Madison: In addition to analyzing the standard point-of-service metrics, we check to see who is taking advantage of the Price Checker program—whether for self-pay or using insurance. We want to quantify the growth from month to month, especially because we are not engaging in a strong marketing campaign at this time.
Tapscott: At Geisinger, there’s great emphasis on the patient experience. So, we use data mining to dissect every step of patient access. We can then track any changes we make to check if they’ve had the intended effect. This has helped us spot improvement opportunities in staffing, data collection, billing accuracy, and point-of-service collections. We also saw how we could improve clinic access and physician availability. We’ve noticed that the more data mining we do, the more confident we are that we offer a patient-centered financial experience that yields solid returns.
HFMA Roundtable Participants
Amy Beal is manager of patient access for Baton Rouge Medical Center in Baton Rouge, La.
Sarah Knodel is system vice president, revenue cycle for Baylor Scott & White Health in Dallas.
Richard Madison is network vice president, revenue cycle for St. Luke’s University Health Network in Bethlehem, Pa.
Barbara Tapscott is vice president of revenue management for Geisinger Health System in Scranton, Pa.
Eric Krepfle is associate vice president at Change Healthcare in Nashville, Tenn.
About Change Healthcare
Change Healthcare is a leading provider of software and analytics, network solutions, and technology-enabled services that optimize communications, payments, and actionable insights designed to enable smarter healthcare. By leveraging its Intelligent Healthcare NetworkTM, which includes the single-largest financial and administrative network in the United States healthcare system, payers, providers, and pharmacies are able to increase revenue, improve efficiency, reduce costs, increase cash flow, and more to effectively manage complex workflows. Learn more at www.changehealthcare.com.