Patients are now the fastest-growing payer in healthcare—and the financial challenges they face demand that providers change their mindset around payment plan design.

Today, patients shoulder a greater portion of the cost of their care than ever before. About 43 percent of employed Americans are on high-deductible plans, defined as plans with a minimum deductible of $1,300 per individual and $2,750 for family coverage. Among these enrollees, just 19 percent have a health savings account (HSA) that helps them save money, pre-tax, to help pay for their out-of-pocket expenses.

The rise in high-deductible health plans (HDHPs) significantly impacts providers’ ability to collect out-of-pocket costs from patients:

• Forty-three percent of consumers struggle to afford their deductible, and three out of 10 say they face difficulty paying their medical bills, a Kaiser Family Foundation survey
• As a result, an increasing number of consumers don’t pay their medical bills in full, including 74 percent of Millennials, 68 percent of Generation Xers 60 percent of Baby Boomers.
• Families are least likely to pay their out-of-pocket medical expenses in full, according to AccessOne research.

It’s clear that in an era of high deductibles, consumer-friendly approaches to payment are vital to a healthcare organization’s financial health. Here are three ways providers can more effectively engage consumers in paying out-of-pocket costs.

Strategy No. 1: Make sure discussions around out-of-pocket costs for care take place at the point of service. Determine the amount the consumer likely will pay after insurance has covered its portion of the bill. Then, use this information to guide discussions around payment before services are delivered. This sets the expectation of payment before the encounter takes place. It also provides an opportunity for staff to talk with consumers about their financial concerns and work together to resolve them in person.

In instances where the consumer already owes a past balance, it’s important that front-desk staff address this issue at the point of registration: “You have a prior balance of [state the amount]. How would you like to pay this today?” In-person communication is far more effective in engaging consumers in taking responsibility for the cost of their care than communications that are sent via mail, email, or text.

Strategy No. 2: Increase payment plan flexibility. Simply offering a payment plan isn’t enough. Consumers also need to know providers will work with them to adjust the terms of payment if their financial circumstances change. This keeps consumers from throwing in the towel when they fear they can no longer afford their medical bills.

Make sure patient financial services representatives share options for adjusting the terms of payment—both verbally and in writing—at the point of enrollment. Provide a phone number for consumers to call for assistance, and offer consumers the ability to either indicate their need for alternative payment arrangements online. For example, Atrium Health offers consumers the ability not only to view their balance online, but also establish payment plans on their own. The result: a 52 percent increase in new payment plans over 18 months.

Strategy No. 3: Establish revolving accounts. Give consumers the opportunity to create a single payment plan for the healthcare organization that encompasses all episodes of care—for themselves and their dependents. This keeps consumers from having to manage multiple monthly payments from the same provider and increases the chances of collection.

Developing a More Patient-Friendly Approach

Taking proactive steps to engage consumers in the out-of-pocket costs for their care before service is delivered helps remove confusion and anxiety from this process. It also eliminates the potential for surprise and empowers consumers to state their needs from the start of the encounter.

For more information on patient-friendly approaches to billing, see these HFMA resources, or contact us.