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To fine-tune financial counseling processes, some patient access departments are implementing “propensity-to-pay” tools. These determine a patient’s likelihood of paying their out-of-pocket expenses, based on their credit history.
“Hospitals typically see a 10-30% lift in their cash flow, if this is fully deployed at the front and back of the revenue cycle,” according to John Yount, vice president of product for TransUnion Healthcare. This is because of increased point-of-service collections on the front end and decreased bad debt on the back end.
“Innovative, industry-leading hospitals see the importance of engaging their patients up front,” Yount notes. “Patient portion amounts in the thousands of dollars are a new paradigm.”
Connecting patients with affordable payment options and/or financial assistance in advance of services is essential in today’s healthcare environment, according to Yount.
A decade ago, deductibles averaged about $500, and 10% coinsurance was the norm; most patients could afford $30-$50 per month in payments. “Now, they have quadrupled, and are pushing $2,500, making those monthly payments $200, which is similar to a car payment,” Yount explains. Additionally, coinsurance is in the 20% range.
“As this trend continues, patients are becoming a payer,” Yount says. “Negotiating payment terms in advance is the best way to avoid downstream debt risk.”
Providers that engage the patient early to discuss financial implications and collect payment are finding that patient satisfaction is improving while their bad debt is declining, Yount adds. “Using analytics like propensity to pay empower the provider to have the right conversation at the right time with the patient,” he advises.
The cutting-edge practice in financial clearance ensures that electively scheduled procedures are “preapproved.”
“Patients with funding gaps are now either provided financial assistance or are asked for a down payment or full payment,” Yount says.
Forty-four percent of hospitals are using propensity-to-pay tools, and only 45% are using financial assistance presumptive eligibility analytics, according to a 2016 survey conducted by TransUnion. Yount expects this percentage to increase. “As patients shoulder more of the rising healthcare expense, understanding their financial position will become more important.”
Pete Kraus, CHAM, CPAR, FHAM, business analyst for revenue cycle operations at Atlanta-based Emory Hospitals, says propensity-to-pay data could streamline registrations for frequent visitors who don’t like hearing the same questions during each encounter.
“This is for patients who use the facility regularly or are known to be reliable customers, not first-timers or those who use the facility infrequently,” he explains. If a facility offers a payment portal with propensity-to-pay capability and ability to receive scheduling information for enrolled patients, the portal might be able to send emails or texts to patients who pass the screening threshold.
Patient access wouldn’t need to call or interview these patients. “Other types of portals or communications systems might be adaptable,” Kraus adds. “Maybe there are less high-tech ways to achieve the same result.”
Many patients with a high propensity to pay would appreciate not receiving constant calls and emails. “These are the patients who typically complain about being asked the same questions repeatedly at each visit,” Kraus says.
This group also would appreciate reviewing their own records for accuracy quickly, then present for service without waiting to be interviewed. “Access staff would have more time to focus on patients with low propensity to pay,” Kraus says.