The economics of being a patient right now is putting higher stress on consumers—and it’s a situation that is about to get worse
Consumer sentiment hit a record low in June as inflation increased at its fastest pace in 40 years this past May. Early this year, there were signs that consumers were tapping into savings to cope with inflation, from rising gas and food prices to higher costs for rent and housing, as well as big-ticket items like automobiles.
Meanwhile, the savings that many consumers accumulated during the first year of the pandemic, when discretionary spending was down and COVID-19 stimulus funds were often tucked away or used to pay down debt, have decreased sharply.
In the first quarter of 2022, credit card spending rose 20%, while borrowing increased $42 billion in February 2022—five times higher than in January and more than double the amount experts predicted, an analysis shows. And while some borrowing has gone toward vacations and nice-to-haves, a significant portion has gone toward everyday needs—a sign that inflation is eroding Americans’ ability to stay on top of living expenses.
Given these realities, it’s safe to say that the patient financial conundrum in healthcare just got a lot worse, and the 2023 reset for insurance deductibles is only five months away. Consequently, now is the time for healthcare revenue cycle departments to determine how they will ease the financial stress of care for consumers to ensure they receive the care they need.
An Urgent Issue for Healthcare Revenue Cycle
Healthcare isn’t getting any cheaper. The Centers for Medicare & Medicaid Services estimates that healthcare costs will rise 3.6% in 2022, while out-of-pocket costs will climb 6.1%. The reason: rising labor and supply costs.
When forced to choose between paying for food and utilities or paying for a medical bill, an AccessOne survey indicates healthcare bills fall low on consumers’ list of priorities. Further, 58% of consumers surveyed said they would delay care to avoid the expense—and one out of three had done so during the pandemic. As household budgets tighten, the potential for consumers to avoid medical payments, whether by delaying care or putting off healthcare payments, likely will increase.
This presents a bleak picture for cash collection efforts at a time when 46% of revenue cycle teams are behind on their revenue goals, according to a recent report.
That’s why healthcare revenue cycle departments must invest in resources that give patients confidence that they can manage the cost of their care. They also need to provide greater clarity around consumers’ financial responsibility for care. Responses to the AccessOne consumer survey show consumers want more from the patient financial experience than healthcare providers deliver:
- 41% are confused about the portion of the bill that their insurance will cover.
- 39% are only somewhat satisfied or not at all satisfied with the quality of communications around how to pay for healthcare costs.
- 40% are only somewhat satisfied or not at all satisfied with affordable options for payment—and one out of three say communication regarding available payment plans for their bill could be improved.
Given that nearly half of healthcare revenue cycle departments face an extreme shortage of staff, it would be easy for revenue cycle leaders to think, “Easier said than done,” and place process improvement on the back burner. But there are three ways to help patients navigate the cost of care without putting strain on staff.
Tighten patient financial communications.
Just 25% of consumers are very satisfied with the quality of communications they receive from healthcare providers regarding availability of payment plans, how to pay for healthcare costs or the range of affordable options that hospitals or health systems provide for managing healthcare costs. Hospitals can strengthen patient financial communications and eliminate confusion at the start of the financial encounter through such strategies as adding clearer language to bill statements or providing digital pathways for support, web resources or live assistance. This raises the likelihood of payment while creating a better impression of the healthcare organization at the last stage of the patient encounter.
Provide greater flexibility around payment.
Even before consumer debt levels began to rise, 60% of consumers surveyed stated that affordable monthly payment options are important to them, according to the fall 2021 AccessOne survey. By providing a variety of affordable payment options and communicating them broadly, healthcare revenue cycle departments can improve patient financial satisfaction and engagement, improving hospitals’ bottom line.
Look for a payment partner to provide and manage patient financing plans.
Sixty percent of consumers surveyed by AccessOne say they want affordable monthly payment options, including 65% of households that make $50K to $100K. With a partner like AccessOne, healthcare organizations gain access to a self-service payment platform that allows patients to conveniently pay their bill in full or opt into interest-free or low-interest payment plans. This takes pressure off overstretched revenue cycle teams while boosting consumers’ confidence that they can manage the cost of their care on their terms. The time to implementation is short—just eight weeks.
As consumers’ shoulder more financial responsibility for care, putting the right solutions in place to ease consumers’ financial stress before higher deductibles go into effect helps ensure consumers receive needed care. It also increases the likelihood that organizations receive payment for the care provided in a timely fashion.
The time to act is now.