Modern payment methods are key to healthy practice cash flow, patient satisfaction

More than two months have passed since the Change Healthcare cyberattack and many practices are still struggling to recover. According to a recent survey by the American Medical Association, restricted functionality due to the outage has left providers struggling for cash flow, with 80% of practices reporting lost revenue and 55% of respondents being forced to use personal funds to cover expenses.

Since about 56% percent of American practices have 10 or fewer physicians, it’s easy to imagine how difficult the recent period has been. That said, the unfortunate reality is that providers have been struggling with maintaining healthy cash flow and revenue streams for years now, with insurance payers providing the majority of revenue for them. As a result, payers are strained by high-dollar claims and providers struggle with balancing cost savings and effective care.

The recent upheaval can be a driver for necessary change. By diversifying their revenue stream, providers can strengthen their cash flows. As patient balances continue to rise while collection rates stagnate, patient payments could provide practices with a crucial untapped revenue source as well as help contribute to a more sustainable financial future.

Patient payments enable short-term recovery and long-term resilience

The health care industry is in a constant state of flux. Because of events such as the Change Healthcare attack, uncertain economic conditions, and constantly evolving patient needs, medical providers have been exploring various ways to increase cash flows by diversifying their revenue streams. While some large organizations have begun manufacturing pharmaceutical drugs, selling insurance, and creating tech solutions to sell to smaller providers, patient payment collections enable both a much-needed short-term recovery boost as well as a more realistic source of revenue diversification for small- to medium-sized practices.

By helping enable both short-term recovery efforts and long-term resilience following future industry disruptions, patient collections give organizations the financial stability to invest in their employees, software and IT upgrades and overall patient experience, ultimately leading to more efficient and higher quality care.

To implement effective patient payment collections, providers must evaluate their current internal processes, embrace modern collection methods, and train staff to communicate clearly with patients about available payment options.

Patients want modern payment methods

Despite 75% of patients preferring to pay medical bills online, 71% of providers most often use paper and other manual processes when billing their patients. Patients prefer online payment methods such as email or portals since they offer flexibility, convenience, and time to evaluate how to pay their balance. Offline processes such as paper statements, checks, and phone calls are often more confusing, easily misplaced, and difficult for patients to remember.

Patients are willing to pay their share of costs, but it’s up to providers to offer them the mediums and payment plan options they prefer. Consider the patient’s experience and their perspective: offering less cumbersome, more convenient payment options allows them to stay on top of their bills.

The best way for health care providers to meet patients’ wants is to audit their current accounts receivable processes. This allows providers to pinpoint what’s working and what needs to be improved. Identifying administrative burdens that can be streamlined or automated can help staff focus on addressing more immediate patient needs. Make sure any new system or portal applications are fully compatible with different payment methods and that both staff and patients fully understand how they work.

Modern payment options, including text-to-pay, card on file, financing and payment plan options, and online patient portals are increasing in popularity due to their ease of use and flexibility. These methods boast higher open rates, resulting in more bills being paid on time. Patients are more likely to seek care when given flexibility in both payment medium and plan.

Training staff to communicate clearly and compassionately

As over 41% of patients think their provider is not always transparent about care costs, patient-facing staff play an essential role in successfully implementing an effective patient payment collection process. By providing them with a comprehensive overview of the collection process, staff members will have the technological, financial, and social literacy required to successfully manage patient interactions. If at any point the patient appears confused, raises concerns, or asks any questions, staff will be well equipped to help the patient understand the situation.

Staff should avoid overly technical phrasing and medical jargon when discussing payment options with patients. Concise, broken-down explanations that clearly articulate the differences between all available options are easier for patients to understand and enable each side to collaboratively reach a consensus on the best path forward.

Since affordability is often the top barrier to paying bills, patients often feel anxious when discussing their medical costs. Patient-facing staff should be trained in how to approach payment conversations compassionately, at an opportune time, and with a helpful tone. Taking these crucial steps helps build a transparent, trusting, and long-lasting provider-patient relationship. Investing the time in educating and training staff ensures an efficient, effective patient payment collection system.

Diversifying revenue streams

Patient payments represent just one part of the diversification process. Providers, especially small- to medium-sized practices, must continue to diversify their revenue to guard against the effects of external disruptions. While individual patients are not expected to provide hospitals with the majority of their revenue, modernizing collection methods enables providers to address what’s become an increasingly neglected form of revenue for them.

Building a more diversified revenue stream ultimately provides long-term resilience to outside influences and financial stability to protect and invest in their practice, ultimately facilitating higher quality, more effective care delivered to their patients.

Kim Howland is SVP Product at Rectangle Health