Let’s face it: now is a challenging time for healthcare providers. As the impacts of the pandemic linger and inflation drives up the cost of drugs and supplies, nearly one third of hospitals are operating with negative margins.
Optimizing patient responsibility collections is an absolute priority, which is why your organization is shopping around for new patient financing solutions. Every percentage point matters.
The good news is that the market has expanded to meet this growing need; you have more patient payment solutions available to you now than ever before. But this crowded market can make it difficult to make the right choice for your hospital. This is no simple selection process. You have a plethora of variables to consider, each of which can have a major impact on the financial health of both your organization and its patients.
So how do you know if a patient financing solution is right for you? Start by asking these four questions.
1. Is this a personalized approach to patient billing?
Traditional patient financing plans follow a simple equation: the total amount owed by the patient divided by a set number of months. This one-size fits all approach has an obvious drawback for medical billing: what’s affordable for one patient may not be affordable for the next.
Drawing on artificial intelligence, modern affordability solutions add another critical variable: a patient’s unique ability to pay. Machine learning can compare a patient’s financial data to millions of other data points to generate what we call a “propensity to pay model”—in short, an estimate of a specific person’s capacity to afford a specific medical bill. Not only does this healthcare technology allow providers to identify patients at risk of failing to pay, it supports those patients with personalized payment options designed for their financial needs.
That’s a true win-win. No longer buried underneath a large lump sum, the patient is able to pay off their medical bill on their own terms. That in turn improves patient collection rates for providers and frees up cash previously trapped in the revenue cycle.
2. How easy is it to install?
Some patient payment solutions can take eight to 12 months to get up and running. If your organization is like most healthcare providers struggling with rising costs and declining income, you need results now, not a year from now.
One key question to ask is whether the patient financing solution integrates with your existing financial software. Are they listed in app libraries like the Epic App Orchard? Do they provide APIs that easily snap into your technology stack? If not, you’re likely looking at a lengthy and expensive period of development before you start to see ROI. Modern solutions should be able to quickly and easily integrate with your existing systems and workflows, cutting implementation time from months down to weeks.
For a larger provider, implementing a new patient financing and affordability solution may be one of 50 projects underway at a given time—and staff is probably shorthanded as it is. Hospitals just don’t have the time and resources to commit to lengthy, time-intensive integration periods.
The quicker and easier it is to plug in, the sooner you can be generating meaningful ROI and boosting cash flow.
3. How easy is it to use?
Healthcare providers across the country are desperately short on staff amid the ongoing pandemic and the Great Resignation. Hospitals in nearly 40 states faced critical staffing deficiencies this summer in what the American Hospital Association called a “national emergency.” Nurses have been the most notable occupation affected but hospitals are shorthanded across the workforce.
The point is that providers don’t have the human resources to oversee and maintain billing workflows that require a lot of hands-on effort. In addition to asking about ease of implementation, you’ll want to ask about staff requirements and upkeep once the new patient financing system is in place.
Automation is key here. Traditional patient collections rely on manual outreach, often phone calls. Whether that work is done in-house or farmed out to a medical billing and collections center, it can be a significant resource drain. Technology can remove much of that burden. Using AI, modern patient financing solutions identify the best time and channel (such as email or SMS text) to contact a patient with a personalized billing reminder.
Not only does this allow providers to reallocate staff time, but the more targeted, less intrusive approach creates a better patient experience and is more effective in driving collections.
4. How does this solution treat our patients?
All of the questions on this list are important, but I know that, as a healthcare professional, nothing comes before the well-being of your patients. That extends beyond the medical care you provide; the long-term financial health of your patients matters to you.
Unfortunately, the standard medical billing collections process has for too long come at the expense of patients’ financial well-being. Patients who default once their debt is handed off to third-party agencies are often sent into an aggressive collections process and eventually into debilitating debt. One in 10 Americans adults are in medical debt of some kind, including over 3 million people who owe $10,000 or more. Medical debt has become the leading cause of bankruptcy in our country.
That has to change, which is why selecting a payment solution that treats patients with compassion and empathy is critical.
Whether recourse or non-recourse, traditional patient financing solutions will send defaulted patients through some type of collection efforts. With a recourse solution, the hospital takes back the receivables and sends the defaulted patient to bad debt. With a non-recourse solution, the lender sends the patient to a collection agency that they have hired.
Not with PayZen. Because the patient is off the hospital books when they sign up for our affordability solution, the hospital will never have to send patients to collections. (This not only spares the patient from bad debt but lowers bad debt expense for the hospital.) If the patient on a PayZen defaults, we write it off. We never sell off bad debt or send patients to a collections agency.
PayZen is the only healthcare financing solution in the marketplace in which a defaulted patient does not directly or indirectly end up in bad debt.
Most people, when given affordable options, will gladly pay for the medical care they receive. That premise is the foundation on which any good patient payment solution should be built. By offering flexible plans designed specifically for that individual’s financial situation, providers lower the financial burden of their care and, as a result, collect more patient responsibility.
That means fewer people sent into medical debt and healthier margins for providers. That’s what your patient affordability solution should deliver.
