A small but growing number of hospitals run “propensity to pay” tools on patients. This tells facilities how likely people are to need a payment plan, charity care, or financial assistance.
“Propensity to pay analytical tools are used to tailor payment plans, loan qualifications, needs-based discounting, and charity determinations,” says Jonathan Wiik, principal of healthcare strategy at TransUnion Healthcare.
Ideally, the tool is used before patients arrive for all scheduled visits and for all walk-in patients before they are discharged, Wiik says. Only about 10% of hospitals do so currently. About one-third of hospitals give price estimates before service. “If the patient is unable to pay, analytics are performed to determine the financial position of the patient,” Wiik explains.
The propensity to pay tool is used to make decisions on down payments, payment plans, loan qualifications, needs-based discounting, and charity determinations. All this varies, says Wiik, depending on the urgency of the clinical intervention and the financial position of the patient. The best-case scenario: That it is all figured out during a preservice phone call. This is especially important for self-pay patients and those with high balances.
“Most hospitals’ yield in this area for financial clearance of all patients is in the 50-60% range and can be as high as 80-90% on the scheduled patients,” Wiik reports. Registrars at Intermountain Healthcare in Salt Lake City now calculate a propensity to pay score. “This helps guide ongoing conversations with the patient,” says Todd Craghead, vice president of finance and the revenue cycle.
The score determines the next step revenue cycle staff will take. Certain patients clearly qualify for some sort of financial assistance, so staff can help them apply for it. Others need guidance on how to set up payment plans.
Patients who require a financial conversation are grouped together. Patients who need to set up payment plans are handled separately. “Accounts are flagged based on the results,” Craghead adds.