Despite all the attention being paid to modernizing today’s healthcare experience, the patient payment process remains stubbornly old school. Inside most financial departments, the payment mindset often centers on short-term collections. Yet just as on the clinical side, it is important for financial leaders to consider ways they can help maximize a patient’s return visits and lifetime value.
A patient may come in for a wellness exam, but will that patient recommend the practice to friends? After a new mother delivers her baby, will she continue to take her children to the health system’s pediatricians? Will she recommend the same hospital when her dad needs a knee replacement?
The payment experience often is the last interaction patients have with a healthcare organization within an episode of care. A poor experience—such as receiving multiple bills, confusing statements, or being sent to collections—can completely erase a positive clinical experience. Thus, there is a huge opportunity to establish greater patient loyalty—and boost patients’ lifetime value to the practice—by improving the payment process. A positive patient payment experience can have a compounding effect that pays off year after year.
With patient satisfaction scores tied directly into value-based payments, it is no surprise that improving the patient experience remains a priority for health leaders. That is why many hospitals and health systems track their net promoter score. Patients are influencers who can spread both positive and negative word about your organization. In short, satisfied patients are more likely to recommend a healthcare organization to their friends and family.
In addition, one can assume happier patients are more likely to pay their balances if they are able, especially when the payment process is simple and convenient. However, happy patients appear to be a minority. In a recent nationally representative Consumer Reports survey of 1,000 insured adults who incurred a major medical bill in the past two years, two out of three said they had at least one billing issue, such as higher-than-expected charges, unclear statements, and bills arriving months late. It’s a crucial piece of the patient experience puzzle, which can result in both patient population growth and increased payments. Examples of ways healthcare organizations can improve the patient payment process include:
- Enabling stored payment methods
- Providing email and SMS payment options
- Offering intuitive online payment portals
- Automating pay-by-phone systems
Although there is no single measure or formula to track the effects of a better payment process on a patient’s lifetime value, there are several ways providers can measure improvements to their patient payment capabilities. When reviewed together, these metrics paint a picture of whether a patient is likely to remain loyal and act as a positive influencer to others.
Net collections. Looking at net collections (total collections less cost) is a more suitable metric for patient payments than the traditional cost-to-collect measurement. Rather than trying to minimize cost-to-collect, which better fits a payer-centric model, financial leaders should instead focus on improving net collections and maximizing patient-generated cash flow. Tracking whether this metric is rising independently of organizational growth also is important. After all, when cash increases by 20 percent at the same time the patient population increases by 20 percent, it does not demonstrate improved collections.
Adoption. Providers can assume a certain amount of patients’ satisfaction with payment will be related to how patients use various payment tools or methods and looking at these proclivities of patients can provide some important perspective. Providers should consider, for example, whether people are using financing and payment plans or paying through mobile. If patients are taking advantage of different payment tools, they likely are gaining some benefit from the payment options being offered. By tracking patient usage and adoption rates for each payment option, organizations can evolve their payment processes in ways likely to enhance satisfaction and collections.
Call volume. People often call their providers for help when they are confused about their bills or cannot figure out how to use a payment system. However, if they must take time out of their day to call and sort out payment questions, there is a good chance that they are not very satisfied. When the patient payment process is improved, billing-related calls are likely to drop off significantly.
Patient surveys. Many healthcare organizations are cautious about over-surveying their patients, and for good reason. It would be counterproductive to survey patients to the detriment of their care experience. However, some digital receipts give providers the opportunity to submit a nonintrusive inquiry about their payment experience within an existing interaction.
Boosting Return Visits
Patient payments now make up a larger percentage of net patient revenue than ever before. Therefore, although quarter-over-quarter profits are important, the lifetime value of a patient should not go unaddressed.
A recent Gallup poll found 29 percent of Americans have held off on medical care because of cost. Of those, 63 percent described the untreated condition as somewhat or very serious. This behavior not only has dramatic implications for the health of the nation, but also points to a significant missed revenue opportunity for health systems.
Care must be accessible not only from a clinical standpoint, but also from a financial standpoint. Healthcare organizations that offer more patient payment options can attract new patients and those that might otherwise forgo treatment altogether, while improving satisfaction and loyalty among existing patients.
By improving the patient payment experience, providers will experience a compounding effect of an increase in patient payments. Think of it this way: Revenue opportunities are compounding. Organizations that help patients find ways to afford their health care will benefit not only from patients’ visits today, but also from many more visits tomorrow.
Alan Nalle is chief strategy officer at Patientco, Atlanta.