The industry is seeing record increases in patients’ out-of-pocket costs for care, which is creating a demand for flexible options for payment. But our recent survey shows that while 68 percent of patients want to discuss financing options, most families haven’t had the opportunity.
Twenty-seven percent of households with children are likely to delay care because they can’t afford to pay for it, according to our survey of nearly 700 consumers, each with at least $35,000 in household income.
Families also are less likely to pay their out-of-pocket costs in full—and their chances of having their account sent to collections are twice as high. More than one-fifth of survey respondents with families who had trouble paying their medical bills reported that their accounts had been sent to collections.
Offering Long-Term Payment Plans Can be a Competitive Advantage
We have always believed that the majority of patients want to pay their bill but need the appropriate avenue to do it.
In fact, our survey, conducted by ORC International, shows that 43 percent of families are likely or very likely to switch providers based on the availability of low- or no-cost financing. Patients have the need to stretch out their financial obligation into more manageable monthly payments.
The trouble is, not all providers have adopted flexible payment plans or possibly even realize to what extent having these options can benefit patients (or help providers strengthen their brand). Some utilize medical credit cards and non-recourse payment plans, which can have negative consequences for the patient, ultimately affecting satisfaction. Others use internally-run payment plans that often have short payback periods, which can lead to unaffordable monthly payments for the patient.
Alternatively, offering a long-term payment plan that accepts all patients—and gives them payment choices based on their needs—improves the patient experience. Patients feel empowered to take control of their finances, with a sense of relief knowing they now have a manageable pathway to pay off their obligation.
Revenue Cycle Strategies for Providers
It’s time for a different approach to patient billing—one that takes into account patients’ desire to fulfill their financial obligations for care, addresses their financial concerns from the point of service, and demonstrates a willingness to meet patients where they are. Our research points to three ways providers can improve their patient financial services strategy—and further protect the financial health of their organization in the process.
No. 1: Have discussions with patients about their estimated out-of-pocket expense before or at the point of care. Seventy-seven percent of respondents say it’s important or very important for providers to share information on costs before a procedure. For patients, the most meaningful cost information is their estimated out-of-pocket cost after insurance.
No. 2: Offer a variety of options for payment. Fifty-four percent of those surveyed say they would use a low-interest or zero-interest financing option for a balance of $1,000 or less, while 46 percent would rely on such financing for balances higher than $1,000.
No. 3: Publicize the availability of no- or low-interest financing options. Survey data shows 46 percent of Millennials, 36 percent of Gen Xers and 28 percent of Baby Boomers would switch providers for a better financing option. Offering long-term payment plans helps patients, gives providers competitive advantages, and positively enhances a health system’s brand.
By providing a range of financing options, healthcare providers can boost patient satisfaction and address trends in patient consumerism while promoting stronger communication and a healthier bottom line. The end result is a better patient experience, a stronger brand, and a community benefit.