Prioritize Your Patient Financing Solutions to Navigate Disruption
It’s almost impossible to adequately convey the total damage that the global COVID-19 pandemic has brought on the country. First, there’s the catastrophic loss of human life. Nationally, more than 600,000 Americans have died from the disease, with millions more hospitalized or otherwise affected. In addition to the calamitous loss of health and well-being, the pandemic has also caused widespread economic and financial devastation across many industries.
Thousands of businesses permanently shut down during the pandemic, and tens of millions lost their jobs. This has understandably affected the nation’s mental health and outlook, with one third of all Americans exhibiting signs of clinical depression and anxiety during the initial stages of the pandemic.
Significant Hardships for Both Patients and Providers
It’s important to keep this tragic backdrop in mind as you navigate the needs of your patients, healthcare staff, and revenue teams. It’s likely that many of your patients are living within desperate or dire circumstances. This is likely to affect their financial status and behavior. Matt Seefeld, executive vice-president of MedEvolve, has mentioned the importance of understanding a patient’s situation and mindset. “The last thing that unemployed people want to do is pay their healthcare bill” he says. “I’m going to pay for the things that keep my family alive. The last thing I’m worried about is that bill from six months ago”.
Patients of course, are not the only ones feeling financial pressure. Healthcare providers are also experiencing significant disruption. When the pandemic hit, patients cancelled appointments and procedures in mass. According to Health Systems Tracker, total spending on health services declined by 32% in April 2020. For some healthcare providers, the decline was even greater.
Max Meinerz, a dentist in Wisconsin reported that his patient volume decreased by up to 40% during the pandemic. A combination of COVID-19 fears and protocols, along with an increase in the amount of uninsured due to layoffs, made it especially difficult for patients to successfully pay for services.
It’s no surprise then, that healthcare systems and providers have reported facing significant financial challenges in 2020/2021, and that reducing debt and increasing total revenue are top priorities.
Strategies to Increase Revenue and Decrease Bad Debt
We’ve outlined three strategies that health systems and healthcare providers can take now to maximize their patient payments and reduce their debt liabilities.
- Emphasize Flexibility at all Stages of the Payment Cycle
For many healthcare providers, flexibility was already a central tenant of their payment plans and patient relationships. For instance, patients within The University of Kansas Health System could choose between in-house short-term financing plans or use a vendor such as AccessOne to secure a longer-term, zero-interest plan to pay off debt.
It’s clear though, that the unique circumstances of the pandemic have necessitated an even greater emphasis on flexibility. Healthcare providers should seek to meet patients where they are at in order to maximize payment of services. Providing patient financing solutions that allow for variable terms or monthly payments can be a great tool in adjusting to meet your patient needs.
Patients who initially agreed to a zero-interest, high monthly payment plan, may struggle to pay their monthly payments in full. When this occurs, proactively offering to reduce the monthly payment in exchange for a low interest rate, can be a successful solution.
- Prioritize Debt Collection for Services that are Already Owed
For patients who already possess outstanding balances, it’s recommended that providers begin collecting payment before non-emergency services are delivered. Continuing to deliver care without receiving financial compensation can increase your debt load and reduce your overall revenues. However, it’s important to note that debt collection can be performed with empathy and a patient-driven focus.
Rather than relying on confrontation and leverage, proactively reach out to patients with flexible and highly customizable payment plans. Offer longer-term options along with short-term options to fit the needs of each patient. Providing generous financing terms can help your organization secure payments for services that have already been delivered, thereby increasing revenue and decreasing debt within the same stroke.
- Use Decreased Volume to Improve Efficiency
For proactive health systems and healthcare providers, a period of decreased patient volume is an ideal time to improve aspects of their revenue cycle or workflows. With lower patient volume, your teams will have greater capacity and bandwidth to take on tasks such as working on denials prevention and insurance coverage discovery.
For instance, most billing departments have an “other” category in their financial classifications which contains third-party financial actors such as liability insurance, out-of-state Medicaid, or worker’s compensation financing. While these situations may be less common, in total they can make a significant portion of your revenue cycle. Establishing best practices to better manage these relationships can help your revenue teams cut down on missed revenue or revenue leakage.
Growing from Disruption
The COVID-19 pandemic created a generational level of disruption, volatility and confusion for the healthcare industry. From overwhelming patient loads on emergency rooms, to operating rooms shut down, the pandemic left healthcare managers with unprecedented situations and circumstances. While disruption can be a time of crisis for many, it can also be a period of opportunity and growth. Seizing the opportunity to improve your revenue workflows, patient financing solutions and debt collection procedures can ensure that your organization will leave the pandemic stronger than it entered it.