New Research Examines Self-Pay Patients and the Changing Healthcare Industry

New research from athenahealth examines a key challenge facing healthcare providers today: patient pay, which now represents 18% (and growing) of provider revenue.

Patients are responsible for paying more of their medical expenses than in past years. This is due in large part to the significant increase in high-deductible health plans (HDHPs). According to the athenahealth whitepaper, one million Americans had a HDHP in 2005. That number had risen to 17.5 million Americans by 2014, and as many as 40 million Americans are projected to have HDHPs by 2018.

One major issue is that bills are often not paid in full. According to the research, half of healthcare providers are unable to collect at least $23,000 per year. For groups with multiple providers, this lost revenue adds up quickly - $230,000 for a group of 10, $460,000 for a group of 20, and $1,150,000 for a group of 50.

What should you do if this affects your business? The following steps to collect more patient pay are suggested by athenahealth:

• Determine your current “Patient Pay Yield” by dividing patient charges in a given month by patient payments collected within five months of service.
• Other measures to consider include time-of-service collection rate, self-pay days in accounts receivable, and amount of bad debt write-offs.
• Identify the tactics to help increase patient pay that “make the most sense for your practice’s unique situation and needs.” The paper provides detailed suggestions within four areas of focus:

• Staff training and accountability: If you thoroughly train collectors on the best ways to collect and communicate with patients, your firm will likely see an increase in collections. Keep an eye on everyone's performance and reward those who do well.
• Pre-visit collections strategy: Take time to review a patient's account before discussing payments if they have a large outstanding balance. Try to estimate a patient's financial obligation as best you can - if you communicate this information to the patient before a procedure, it increases collection rates.
• Time-of-service collections: Offer payment plans to patients with big balances, so that they can pay more easily over time. Being flexible in this way leads to an increase in collections. Collect down payments when the total cost of a procedure is unclear. If a patient agrees to it, keep their credit card on file and allow them to check-in digitally with an option to pay their outstanding balance online.
• Ongoing collection efforts: Follow-up with patients to discuss payment on unpaid accounts - if you fail to collect after reaching out, send the account to a collection agency. 

Additionally, athenahealth suggests the following key considerations when choosing tactics:

• How would you best describe your organization? If you’re larger, it’s important to have a consistent approach. If you’re smaller, focus on reliable and low-effort tactics.
• If patients visit you infrequently, focus on getting paid up front. Those with high-cost visits should offer payment plans and follow up with patients.
• Consider the level of insurance coverage of your patients.
• Consider whether your patients carry large outstanding balances.

insideARM Perspective

Self-pay and the changing relationship between patients and their medical bills has been the subject of more research recently, as covered by insideARM.

The Healthcare Financial Management Association (HFMA) found the following:

• Patient payment is rising, with hospitals seeing a 10% increase in self-pay dollars during the past five years.
• More hospitals have mandatory pre- or point-of-service collections processes for outpatient services, with that number rising from 9% of hospitals in 2009 to 32% in 2015.
• About 20% of respondents indicated “high capabilities for pricing and patient education related to billing and administrative expectations,” showing there’s plenty of room for hospitals to educate patients more about this topic.
• About 17% of respondents indicated “high capabilities for pre-service automation, forecasting, and prioritizing financially eligible patient accounts."
• When it comes to engaging patients about paying for their health care, respondents rated pre-service pricing as the most important priority.
• When it comes to engaging patients about paying for their health care, respondents rated pre-service pricing as the most important priority.

HFMA also included numerous “Focus Areas for Self-Pay Process Improvement” for healthcare providers to consider when determining their self-pay policies and procedures, such as:

• Use patient-friendly communications and consistent messaging.
• Give patients access to payment estimates at or before time of care.
• Engage with patients early about issues and options when it comes to paying the bill.
• Ensure patients have access to financial counseling.
• Learn, benchmark, and share best practices.