Mark Spinner

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Just 28% of consumers say they have a strong understanding of which healthcare services are covered by their health plans, a 

 shows. During COVID-19, efforts by healthcare revenue cycle teams to help individuals navigate their coverage and their out-of-pocket costs will be key to consumer engagement.

The pandemic packed a level of financial uncertainty that had not been seen in decades. In 

spring 2020, 36 million people lost their jobs, the highest level of unemployment 

. One analysis projected 26 million people would 

 during the pandemic. Most of them (79%) 

, whether through Medicaid or the insurance exchanges. Some of these consumers might have been able to switch to their spouse’s insurance coverage.

That’s a significant amount of people who could be navigating new coverage in 2021. Given that 38% of consumers who have insurance only “somewhat” understand which expenses are covered under their health plans — and about one in four understand it “just a little,” 

 — it’s important for healthcare revenue cycle leaders to consider: “How are we helping consumers understand their coverage as early as possible in their encounter?”

Here are four approaches that could ease consumers’ concerns and strengthen financial engagement.

Reach out to patients requesting estimates 

 are afraid they won’t be able to afford their medical expenses this year. That’s one reason hospitals should proactively engage consumers that seek price estimates in discussions about out-of-pocket costs of care—the information consumers need most. Without a clear understanding of their financial responsibility for care after insurance, consumers may postpone care based on the estimate alone. That’s a move that could prolong their worries about their health. It could also make existing health issues more serious and more expensive to treat.

Proactively help patients understand their coverage

Just 28% of consumers surveyed say they have discussed which healthcare expenses their health plan covers with their provider, the consumer survey shows. With hospitals 

 in their emergency departments, operating rooms and inpatient units during the pandemic, revenue cycle teams play a critical role in giving consumers the information they need to make informed decisions regarding their care. Make sure consumers understand terms such as 

, and define these terms on billing statements as well. Taking the time to walk patients through their expected benefits not only makes them more confident in pursuing a care plan, but also creates a feeling of goodwill toward the provider.

Two-in-three individuals would shop around for care, and 38% already have, the consumer survey shows. Yet even with a new price transparency rule that took effect in January, 

 with either aspect of the rule, from posting charges for 300 shoppable services in a consumer-friendly format to sharing their payer-negotiate rates or the cash price offered to self-pay patients. That presents a bad image for cost-conscious consumers. In 2021, it’s important that providers make it easy for consumers to find their charge list. Provide the charges in a consumer-friendly format, and make it clear that charges are different from out-of-pocket costs after insurance. Just as important: Give individuals a point of contact for patient financial discussions. These steps give consumers the basis for making an educated decision as they shop for healthcare services. It also reduces financial anxiety when complex discussions around cost of care are needed.

Some patients may be ill-prepared, financially, to cover the cost of more intensive care. In situations like these, approaching self-pay balances with an emphasis on transparency and payment flexibility eases patients’ financial concerns and enables them to continue to seek necessary care without delay. During the pandemic, for example, 

 are experiencing an increase in requests for payment plans. For certain populations, interest in affordable, flexible options for payment runs high: 41% of consumers surveyed say it’s “very important” that providers offer zero-interest or low-interest payment plans, including 49% of Gen Xers and 45% of millennials. About three in five families want to discuss payment plans or financing before care is delivered.

The pandemic’s long-term effects on insurance coverage require a highly compassionate, highly communicative approach to patient financial engagement. Taking the time to educate consumers on what their insurance covers, how much they can expect to pay out of pocket, and the options available for payment that meet their needs is an excellent place to start.

Articles

Many people don't understand their insurance benefits. Hospitals and other providers should proactively explain coverage and out-of-pocket expenses. 

Revenue Cycle’s New Priority: Helping Consumers Understand Their Coverage

Even before COVID-19, half of families with employer-sponsored insurance delayed care or avoided filling a prescription due to cost concerns. Now, with record levels of unemployment and the nation 

, recent data shows consumers need help overcoming financial barriers to medically necessary care.

 conducted in early April shows 58% of consumers would consider delaying a non-emergency but medically necessary surgery this year due to cost, while 56% said they would delay a diagnostic procedure due to the expense.

Perhaps most striking: high-income earners were more likely to say they would delay surgeries and diagnostic procedures than those with lower incomes. That’s because 75% of consumers in the $100K+ income bracket are concerned they will lose their jobs due to the pandemic.

These are sobering statistics. It is clear that assisting members in overcoming financial barriers to care is vital to ensuring they will pursue recommended treatment. Such an approach improves members’ ability to maintain their health while reducing healthcare complications. It also helps contain costs—for members and health plans—over the long term.

How can health plans help members navigate healthcare cost concerns? Here are four strategies to consider:

Educate members on a new IRS rule that covers lifesaving healthcare products and services

 that expands the definition of “preventive services” to include products, services, and prescription medications used to treat chronic disease. The rule enables members to pay for these expenses through their health savings accounts (HSAs). Formerly, HSAs could not be used to treat preexisting conditions.

However, because the rule is so new, members will need guidance around what the rule means and how they can apply it to their out-of-pocket costs for chronic conditions. Health plans should provide targeted marketing by age group and across multiple channels to ensure policyholders with chronic conditions are aware of the change and are able to receive the services they need. One generation health plans should be sure to target: Millennials, whose rate of chronic conditions is 

Run claims analyses to spot members who have not filled prescriptions for chronic disease

. One in three consumers has skipped refilling a prescription one or more times due to cost, a recent 

 have had to choose between filling a prescription or being able to afford food or housing. When members with chronic conditions put off filling their prescriptions because they cannot afford their copay, this results in hospitalizations, readmissions, and increased costs. Use claims data analysis to spot instances where at-risk members demonstrate challenges refilling their prescriptions. Then, assign care managers to contact these members to determine the root cause and find a solution. It’s an approach that helps policyholders with chronic conditions access the medications they need while lowering their costs of care.

Health plans also are testing risk contracts with pharmaceutical companies to ensure members with chronic conditions not only receive their medications, but also demonstrate improved outcomes from taking prescription drugs. These health plans use data to target vulnerable populations and put in place social supports to ensure members get the medications they need. When the medications don’t achieve the desired outcomes, the pharmaceutical companies pay rebates to the health plans.

Assist policyholders in finding lower-cost options for care

 found health plans could save billions by helping members navigate today’s highly complex healthcare system. This strategy significantly reduces calls to customer service and other administrative costs. Options to consider include the following:

Implement health literacy initiatives—especially among those with high-deductible plans

. Health illiteracy doesn’t just affect those who have limited schooling. The analysis found 48% of consumers with low health literacy are college-educated, reflecting the complexity of the nation’s healthcare system. Consider targeted education for policyholders with high deductibles, whether through the health plan app or a short online webinar—and offer incentives for completing the education, such as a $25 gift card for taking a half-hour session.

Use digital tools to help members identify lower-cost options for care

. Incorporate simple tools within your health insurance app that help members quickly determine their out-of-pocket costs for specific types of care and point them to high-value providers. Design the approach so that consumers can identify options quickly and make a decision within seconds.

Work with healthcare organizations to ensure members have multiple options for medical bill payment

 shows 64% of families with children are very or somewhat concerned about their ability to pay for medical care following COVID-19. When providers don’t adopt flexible payment options, consumers feel the burden in multiple ways. According to the survey results, 46% of high-income earners plan to delay non-emergency but medically necessary surgery by up to six months, and 43% would hold off on undergoing a diagnostic procedure. Among other income brackets, about one in three consumers plan to delay care for up to six months.

At a time when cost pressures and income uncertainty have intensified, it’s critical that health plans help members navigate their costs of care. Work with providers to increase price transparency, knowing that the most meaningful price transparency is an estimate of the out-of-pocket costs members will pay after insurance. Encourage providers to offer multiple options for members to settle their accounts, including zero-interest and low-interest payment plans. A 2019 

 found 54% of consumers would use a low-interest or zero-interest financing option for a medical balance of $1,000 or less, and 46% would rely on financing for higher balances.

Taking these steps ensures members who fear they will be unable to pay for medically necessary care following COVID-19 get the care they need when they need it—improving health outcomes while reducing costs of care.

Mark Spinner is CEO and president of AccessOne, a leading provider of flexible, co-branded patient financing solutions that help patients afford medical expenses for health systems nationwide.

Before COVID-19, half of families with employer-sponsored insurance delayed care or avoided filling a prescription. Recent data shows consumers face barriers to care.

Getting Members the Care They Need—Despite COVID Cost Concerns

, the cost of healthcare-and how to pay for it-is the greatest financial concern for Americans, and one of four U.S. households deferred needed healthcare due to cost last year. For those that do seek care despite the fear of cost, a 

 study found that 85% of patients with bill amounts between $500 and $1,000 did not pay their balance in full.

	In this era of high-deductible health plans (HDHPs) and patient consumerism, patients face anxiety and frustration over how to pay for care. However, providers and employers can make care more accessible by being proactive with the communication of positive healthcare financing alternatives. Consumers that are aware of these financing programs can make better decisions about how to access the healthcare they need to get well and stay well.

	For providers, the financial outcomes of this strategy support measurable returns such as reduced bad debt and increased yield on patient responsibility. However, the impact travels beyond financial statements. It creates meaningful strategic advantages, such as patient satisfaction, brand goodwill and loyalty, in a competitive healthcare marketplace where the patient-consumer is ascending.

	Here are four ways to embrace patient consumerism

Patients as consumers expect purchase financing options.

	Imagine going to an auto dealership, selecting a car and taking it out for a test drive. When you return, you tell the salesperson that you’re ready to purchase it. Rather than walking you through multiple financing options, he says he’ll send you a bill-or worse-asks you to pay for the whole car upfront. Would you still buy the car? Or would you move on to the next dealership down the street who offers multiple leasing and financing options? The reality is any business dealing in large-ticket purchasing today is offering consumer financing at the point of consumption, or losing market share to the competitor that does.

	Patients are beginning to have the same expectations in healthcare. If they’re paying thousands of dollars out-of-pocket, they’re going to look for providers who not only offer high-quality care, but also help facilitate payment terms they can live with-just as they would expect when purchasing other big-ticket items.

 Flexible payment options that adapt with real life.

	Legacy financing options like medical loans with high interest rates and/or high fixed monthly payments have some utility. A one-size-fits-all approach to financing is better than nothing, but providers should consider offering flexible, scalable options that ensure all patient occasions can be financed.

	The ability to offer monthly payment flexibility not only attracts more patients to pay, but also gives the patient a range of payment amounts that can help to keep them out of default when other unexpected expenses occur. In a third-party survey of 16,000 patients, 52% of those surveyed changed how they made their monthly payments in order to manage their budgets. These patients may have started on a zero percent interest payment plan, but switched to a plan that lowered their monthly payment amount and carried a low-interest payment. While the zero percent interest options incentivizes on time payments, having flexibility to change their plans at any time allowed patients to continue to pay their bills. Since money and affordability are personal and sometimes embarrassing topics for people, self-directed options also help keep patients empowered and engaged in a compassionate and dignified manner, without burdening the provider’s customer service staff.

	Solutions with distinct programs built for different consumer scenarios, such as balance after insurance for HDHP members, attracts more participation. When patients know they have realistic, affordable and flexible options, it enables them to choose the most appropriate care path for their conditions rather than deferring care they can’t afford, which drives bad clinical outcomes and higher long-term cost.

	World-class customer service and satisfaction is a core principle at The Ritz-Carlton Hotel Company. The staff are methodically trained with many customer service best practices like the “three steps of service,” which includes “anticipation and compliance with guest needs.” To truly optimize patient satisfaction, providers in consumer-driven healthcare need to do the same, by being proactive instead of reactive regarding the issue of affordability. The anticipation of the patient consumers’ potential need for positive financing terms, and the communication that your organization can provide them, is a fundamental part of a customer satisfaction policy built for excellence.

	Wouldn’t it be helpful if a patient notified the provider just before they decided to disengage regarding their unpaid bill? We never know which statement or email will be the last one that’s opened, or the last phone call answered. Essentially, when providers don’t initiate discussions about affordability proactively, they’re playing a game of “chicken” with the patient, risking that he or she might disengage at any time.

	Historically, providers offered payment plan terms only as a last resort. Taking that approach today will likely drive increasing amounts of bad debt as HDHPs continue to penetrate the marketplace. Patients now expect transparency and want to understand their responsibility up front. Using estimators, and discussing payment and financing options available can ensure patients have clear visibility of what they are looking for. However, if they face a bill they can’t pay, either health or wealth will suffer. In that moment, presenting a positive payment plan alternative can be a significant driver of patient satisfaction, and will keep more patients out of high cost, low yield bad debt collection situations.

	Patients who use flexible financing options are more likely to pay their bills. This, in turn, reduces bad debt for providers and fosters a more sustainable revenue cycle. For example, a large integrated health system in North Carolina who offers flexible financing options reduced their bad debt by 27% in a three-year period. More than 5,000 patients and employees of this system were surveyed and rated their patient financing plans with a net promoter score (NPS) of +55, an exceptional rating. The system’s own employees and patients feel genuine gratitude for having positive terms to help them meet their responsibility.

	The winners in this era of HDHPs and patient consumerism are going to have to approach the cost of care much like the sellers of other costly items. They’ll need flexible solutions that facilitate financing and help patient consumers afford their bills in the context of their current income. Otherwise, affordability as a barrier to care will continue to erode provider financial performance and public health while increasing long-term care costs for employers.

a provider of patient financing options designed to help patients manage their healthcare costs. 

Here’s how health systems can provide patients with ways to improve their overall financial experience as the frustration around high-deductible health plans continue to encourage patient consumerism. 

Mark Spinner

Articles

Revenue Cycle’s New Priority: Helping Consumers Understand Their Coverage

Getting Members the Care They Need—Despite COVID Cost Concerns

Four ways to embrace patient consumerism