What are the financial risks of unhappy patients?
That’s the $64,000 question in healthcare today, as our increasingly consumer-oriented industry navigates the opportunities and challenges of retailization. Time and again, surveys show that the top concerns of physicians and hospital executives are not, in fact, patient care and clinical outcomes; rather, they’re consumed with the realities of running a business in this fast-changing landscape.
For example, the American College of Healthcare Executives published a survey in 2017 indicating that, for the third year in a row, “financial challenges” remained the No. 1 concern for hospital leadership. Chief among their financial worries? Medicare/Medicaid reimbursements, operational costs, transition to value-based care, as well as increased competition among providers for patients.(1) And more competition means more providers are putting a greater emphasis on the overall consumer experience, particularly when it comes to the revenue cycle and the increased financial obligations of patients.
More out-of-pocket costs
In addition to expanding coverage, a primary goal of the Affordable Care Act of 2010 was to bend the cost curve of healthcare expenditures in the United States.(2) A steep tax on generous “Cadillac” health plans was one way policymakers attempted to slow domestic healthcare spending, which reached a record high 18 percent of GDP the year before the ACA became law. (3)
Another way U.S. policymakers attempted to curb domestic healthcare costs was by shifting more out-of-pocket expenses to patients, based on the assumption that they’ll be more frugal when spending their own money. The most prominent example of this cost-sharing strategy is how health insurance plans on the ACA federal exchanges are categorized: platinum-level ACA plans require patients to pay, on average, 10 percent of all out-of-pocket costs (deductibles, co-pays and co-insurance), while gold-level plans require 20 percent, silver-level plans require 30 percent and bronze-level plans require 40 percent. (4)
This cost-shifting also has affected the employer-based health insurance market in the seven years since the ACA became law: According to a 2016 study by The Henry J. Kaiser Family Foundation, 51 percent of individuals covered by employer-based insurance in 2016 had a deductible of $1,000 or more, up from only 10 percent in 2006. (5)
Prioritizing patient satisfaction
Increased patient financial responsibility is forcing providers to rethink the ways of the past. With some patients now responsible for up to 40 percent of their overall healthcare costs out of pocket, providers are overhauling their revenue cycle operations, implementing new point-of-service protocols, and enhancing payment and financing options.
They’re also prioritizing patient satisfaction. And here’s why: Happy patients are good for business. According to a 2014 Connance Consumer Impact Study, 95 percent of patients who had a positive billing experience “would return to the same hospital for a future elective service,” while less than 60 percent who did not have a good experience would return.(6) A satisfied healthcare customer also is more likely to pay their bill: In the study, 74 percent of patients who had a positive billing experience paid their balances, while one one-third of non-paying patients did not. Emphasize transparency
One thing is certain in this new era of healthcare: Communicating clear, accurate and timely information to patients about where they stand in the lifecycle of their insurance goes a long way in keeping them happy. Specifically, proactively providing information regarding eligibility, copays and deductibles to patients eliminates sticker shock at the point of service. Remember, healthcare encounters are often stressful for patients. And under these circumstances, also learning that you owe more than expected can make a bad situation even worse.
Interested in learning how Alveo can improve patient satisfaction scores? Let’s talk. We provide clients with tailored business solutions that simplify workflow, minimize operating costs, and maximize reimbursements. Our services include patient eligibility verification, claims processing, remittance advice, patient statements, patient payment portal, customized reporting and analytics, and a unique electronic prior authorization solution set. We process more than $1 billion claims each month with a 98 percent annual client retention rate. And through our connections with more than 4,000 payers, we possess a 96 percent clean claim rate.
1 American College of Healthcare Executives, “Survey: Healthcare Finance, Safety and Quality Cited by CEOs as Top Issues Confronting Hospitals in 2016”
2 Goodman, J., “Bending the cost curve,” Health Affairs, 2010
3 McKinsey & Co., “Accounting for the cost of U.S. health care,” 2011
4 Webmd.com, “Your Insurance Choices in a Marketplace: FAQ,” 2016
5 The Henry J. Kaiser Family Foundation, “2017 Employer Health Benefits Survey”
6 PRWeb.com, “2014 Connance Consumer Impact Study Shows Link Between Business Office, Patient Payment Behaviors and Patient Satisfaction”