THERE IS A NEW SOURCE OF LOST BUSINESS for physicians, clinical laboratories, and others. Patients are losing patience with confusing bills from their providers and opting to find new providers who offer simple, clear, and consistent bills. This turnover in patients was one key finding in a recently-published report.
The report, issued by InstaMed, a national payment network based in Philadelphia, determined that, as healthcare costs rise and there is increased confusion about what patients owe, consumers become dissatisfied and increasingly are willing to choose new providers.
“The consumer voice will become harder to ignore as dissatisfaction takes the shape of customer attrition and lost revenue for providers,” wrote the authors of InstaMed’s “Trends in Healthcare Payments Eighth Annual Report: 2017.”
For clinical laboratories, the InstaMed report made four points.
1. Consumers are unhappy;
2. Digital transactions have consequences in healthcare;
3. Using paper creates friction; and,
4. Security is a growing concern.
Two factors influencing how providers, including labs, bill and collect from patients are the sustained rise in healthcare costs and the growing number of consumers enrolled in high-deductible health plans (HDHPs). It is smart business for clinical labs and pathology groups to acknowledge that the steady increase in patients with high deductibles means it is necessary to update and increase the accuracy of the lab coding, billing, and collections process. Of equal importance, labs need to rework their billing procedures in ways that improve the customer experience.
An Experience-Revenue Link
The InstaMed report states that patients who have a poor, confusing, or frustrating experience [with how they are billed by their providers] will move to other providers, leading to “damage to healthcare brands and ultimately lost revenue.”
“Consumer loyalty is increasingly tied to the healthcare payments experience, as 65% of consumers would consider switching healthcare providers for a better healthcare payments experience,” the report said.
Consumers are attracted to HDHPs because the premiums for these plans are lower than they are for other health plan options. However, HDHPs require consumers to pay more at the point of care, including when they need clinical lab testing and other services. Therefore, clinical labs would do well to make payments easier and less confusing whenever possible, the report showed.
“For provider organizations, there is a direct connection to patient collections and their bottom line as payers cover less of the amount due for services rendered,” the report states. “As consumer responsibility and frustrations increase, that connection and the [financial] impact to providers, becomes more prevalent.”
In 2016, hospitals delivered $38.3 billion in uncompensated care. “This could be why 58% of providers report their top revenue cycle concern is related to patient collections,” the report said.
Medical bills from providers confuse 70% of consumers, and the explanation of benefits that health insurers send to members confuse 72% of consumers, the report showed. What’s more, only 9% of consumers can define such common terms as a premium, deductible, co-insurance, or out-of-pocket maximum.
For evidence of the depth of consumer confusion, the report states 73% of providers say it takes a month or more to collect a patient payment, while 80% of consumers report they pay their bills within three weeks.
Causes of Dissatisfaction
Among the experiences that cause dissatisfaction are: More than 50% of consumers received a bill for an amount they expected their health plan to cover or had an amount due for more than was expected. And, more than 25% of consumers had a medical bill turned over to a collection agency last year.
“These experiences could be why consumers not only feel healthcare does not deliver good value, but are also becoming fearful and frustrated with the industry,” the report states. “Indeed, 40% of consumers fear the costs associated with an illness. That is more than the percentage of consumers who fear an illness itself.”
InstaMed made four recommendations. One, consumer demands must be a top priority. Adopt best practices from other industries so providers can reduce friction in the consumer experience.
Two, resisting the digital world will backfire. “The data is clear: Consumers want automated and electronic payment options while clearly understanding what they owe and how to pay,” the report said.
Three, retire paper and embrace digital payments so providers can reduce overhead and collect more from consumers.
Fourth, security and compliance must be a priority. Providers need to recognize that the issue with data breaches is not if, but when. “Any organizations unsure if their data is at risk should assume the worst,” the report states.
Consumers Are Unhappy with Unclear Provider Bills
TODAY’S HEALTHCARE CONSUMERS are dissatisfied with the lack of value they get from healthcare. This is one key finding in the reported issued by InstaMed. As healthcare costs rise, consumers want providers to offer more electronic transactions, eliminate paperwork, and beef up security, the report said. In the report, InstaMed highlighted the following four points.
First, consumers are not happy. While consumers spend more on healthcare every year, education and outreach to them about these payments have not kept pace with the rise in payment responsibility, leading to frustration and fear among consumers. “The consumer voice will become harder to ignore as dissatisfaction takes the shape of customer attrition and lost revenue for providers and payers alike,” the report states.
Second, it is time to fully embrace digital transactions. Consumers demand convenient, frictionless payments and will turn to social media when experiences do not meet their expectations.
Third, paper is like sandpaper in healthcare. Overwhelmingly, healthcare remains loyal to paper, especially for payments. Heavy use of paper costs all industry stakeholders.
Fourth, security concerns aren’t going away. Compromised data causes financial losses, reputational damage, and customer attrition.