The Journey

Transforming the Patient-Provider Experience

Written, edited and curated by Loyale founder Dan Peterson, The Journey explores ideas and innovation to enrich the patient-provider relationship

Thriving in a Cost-Conscious Healthcare Marketplace

Posted by Kevin Fleming, Chief Executive Officer on Dec 10, 2018 1:21:34 PM

The increase in patients’ individual financial responsibility poses a serious challenge to hospitals’ billing and collections practices, because institutional payers and individual patients behave in very different ways. Insurance companies and government payers require a lot of data in a structured, standardized process. Patients are much more diverse. They prefer to communicate in different ways, and they require simple, flexible processes.

_NEW_ V2- Thriving in the New Healthcare Marketplace

From the perspective of revenue collection, perhaps the greatest difference is that individual patients are much more likely to be unable to pay their bill. With an insurer or a government agency, the challenge is convincing them of the validity of claims so they are willing to pay. But patients are far more likely to be concerned about their ability to afford care.

Bankrate’s 2018 financial security survey found that only 39% of Americans were prepared to cover an unexpected $1,000 expense from their savings. Almost 50% of respondents said they would have to borrow money or cut back on other expenses to make ends meet.

As patients become more cost-conscious, the quality of hospitals’ financial engagement with patients will become an increasingly important source of competitive differentiation in the marketplace—with far-reaching impacts on patient loyalty and provider revenue.

Healthcare Providers Need to Step Up their Game


Providers are forced to write off large amounts of revenue because they can’t effectively collect it from patients. As the industry continues to shift toward patient-driven payments, hospitals simply can’t afford to continue losing revenue at current rates.

Patient postponement or abandonment of care is a good example. Many providers are unable to measure this, but we estimate that at least 5% of patients abandon planned treatments or procedures. Cost—or fear of cost—is often a key factor in the decision to delay or avoid care.

It helps to apply the principles of portfolio management to patient financial responsibility. Studies have shown that there is a critical segment of patients who would be willing to pay for care but believe that they are unable to afford it. In many cases, this primarily represents a lack of access to effective financial planning.

Pre-procedure engagement helps patients understand how they can manage medical bills. First of all, providing transparency prevents unrealistic financial fears that can drive patients away. Hospitals can also provide options, incentives, and tools to assist patients with financial planning. For example:

  • Digital tools to set up a payment plan customized for the patient’s budget
  • Third-party lending options with timelines and total cost estimates
  • Prompt-pay discounts to reward proactive patients

For the patient, these features transform a scary, confusing medical expense into a manageable item in the household budget. This is a big win for the provider too, because patients become much more likely to fulfill their individual responsibility.

Patient Behavior Is Only Half the Puzzle

Today, many hospitals are writing off 50% or more of revenue from patient sources. Patient reluctance or inability to pay is only the first part of the problem. High collection costs also hit the bottom line. Even when patients pay in full, they often pay late, and only after a series of letters, calls, and other outreach from the provider. These costs add up quickly, potentially shaving another 5-10% off of the total collected.

Taking a digital approach to patient financial engagement can significantly reduce the cost to collect from patients. However, hospitals shouldn’t just automate their existing processes. Replacing paper documents with webpages can generate savings, but modest operational changes can deliver dramatic improvement in revenue collection—especially when resources are allocated from a portfolio management perspective.

Pre-procedure financial engagement, pricing transparency, and straightforward financial planning tools are all part of the solution. It’s equally important for providers to follow up and ensure that patient payment plans are performing appropriately.

Healthcare decisions will always be complex and deeply personal for patients and their families. But we can make the process of paying for care much simpler for everyone and dramatically improve the overall patient experience by simplifying the financial aspects of care.

Loyale is dedicated to this mission. And we’re encouraged to see stakeholders across the healthcare industry embracing the principles of transparency and inclusivity. The consumer age of healthcare is fast becoming the new reality. We’re proud to be a part of the revolution. 

Topics: Patient payment, healthcare consumerism, patient affordability, patient consumer

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