Why the rising costs of treatment and increasing patient financial responsibility means its time for physicians to embrace the cost discussion
These days the relationship between physicians and patients is expanding beyond medicine. Physicians play an integral role in a patient’s medical life, including fulfilling the role of financial advisor.
No, I’m not suggesting you get financial credentials and advise your patients on their retirement strategy. Instead, what I’m suggesting is that you and your staff serve as trusted resources to help your patients find the most cost-effective services for the medical treatments you are recommending.
I see this as a sign of medicine coming full circle, returning to a time when the emphasis was on the relationship between a physician and a patient. After years of insurance companies being in the middle, the products have evolved in a way that creates a stronger dynamic between patients and their health care advisors.
This might seem like an impossible role for you because the healthcare system today isn’t set up to facilitate this type of relationship and to give you access to costs for services. But more access to this information is granted every day as technology advances.
This is great for physicians and patients. Patients appreciate having a relationship with a physician-and the physician’s staff-they can trust. They want to feel a sense of support from their physicians and know their doctor is there for them through the decision-making process, helping them evaluate what’s best for them, including the costs associated.
Your patients’ interest in cost is directly correlated to their personal financial responsibility. High-deductible health plans are starting to dominate the market forcing patients to take on more responsibility for the cost of their healthcare services because they’re paying more out of their own pockets. They have more at stake than ever before, which gives them a higher incentive to pay the least amount of money.
Physicians can expect to see more and more patients with high-deductible health plans, usually with deductibles somewhere in the range of $3,000 to $5,000. This shift has a tremendous impact on physicians, as I’m sure you already know. Instead of collecting the majority of your payments for services from the insurer, you’re collecting a bigger portion from the patient than you have in a long time, putting you in more of a financial relationship than ever before.
According to a recent research report from Public Agenda, 67% of patients with higher deductibles in the range of $500 to $3,000 and 74% of those with deductibles higher than $3,000 have tried to find price information before getting care. There just aren’t a lot of tools for patients right now that allow them that transparent look at costs. This issue of transparency is affecting physicians as much as it’s affecting patients.
The most recent stats on bad debt for providers are from 2010, and the numbers were grim then. According to a report from McKinsey & Company, consumer bad debt in health care resulted in more than $65 billion in uncollected revenues in 2010. This is across all providers, including hospitals, but any physician can look at their practice’s books and tell you there is a good chunk of money that gets assigned to bad debt. ACA International conducted a survey in 2013 that showed non-hospital providers experience a 21.8 percent recovery rate from patients who have gone to collections. Primary care physicians are some of the hardest hit by bad debt and slow revenue cycles because their margins tend to be much smaller.
You are in a prime position to find solutions and get your patients to adapt to the responsibility they have and help them dial into their benefits. When a physician provides a sense of support and advocacy on a patient’s behalf, it leads to greater patient satisfaction and higher referral rates. And when handled properly it also decreases bad debt ratios and limits your exposure.
If you’re ready to embrace this role and enhance the services you provide for your patients-for their benefit and your own-there are several things you can do.
It starts with your mindset. As I’ve outlined here, it’s in your business’s best interest to minimize your patients’ financial risk as much as you can. Embrace the role your patients are expecting you to fulfill. Then set the tone for your staff that you are all helpful advisors ready to help patients find the most cost effective treatment plans.
Next you want to train your front office to prepare for a patient’s first appointment to minimize the risk of unpaid services. And studies show it’s not that patients don’t want to pay. If you have the conversation about cost responsibility with your patients at their first appointment, or even prior to it, you will find they understand the responsibility they have and are more than willing to meet it.
While it’s essential that all physicians tackle their front office operations to increase payment collection at the time of service, I’m suggesting that you take it one step further and help your patients find care at reasonable prices. This increases your chances of being part of their payment plans.
For example, if you recommend an MRI and refer your patient to the hospital, which on average charges three times what the nearest imaging center charges, you are burdening them with unnecessary costs. Remember, they trust you. If you say to go to the hospital for an MRI, they are following your directions. But when the unexpected bill arrives, they will blame you, leading to lower patient satisfaction scores and decreased referrals. This example gets even more complicated with the introduction of accountable care organizations and narrow networks, or when you are a part of an integrated system and don’t have many options to navigate the patient.
Unfortunately there’s not a common mechanism at the time of service to understand how much is owed and how much is due from the deductible. But solutions do exist. You and your staff have to be proactive and creative about finding the information for your patients.
As the relationship between you and your patients goes beyond medicine, embrace the integral role you have in your patients’ medical life, including the role of financial advisor. Your outcomes will improve, your revenue cycle will shorten, and your bad debt will decrease. And you will have stronger relationships with your patients.
Hanny Freiwat is the co-founder and president of Wellero, developer of a mobile healthcare payment app based in Portland, Oregon.
Educate your practice
Teach yourself and your staff. Find out which insurers and employer groups have tools that will help your patients. Many of the larger health insurance companies are offering some kind of transparency tool.
Encourage use of payer portals and mobile tools
Talk with your patients about using their insurer’s member portal and mobile tools, as well as any tools you offer to make payments easier to understand and more convenient. Take it a step further and assign someone in your office to help patients while they’re in the office with you.
Turn to your software solutions
Look to your practice management software, eligibility platforms, and electronic health records. These tools can be a simple way for your staff to obtain information ahead of time and for you to be prepared with costs about services you’re recommending. Have a conversation with the patient when they check in for their appointment, at scheduling or a few days before the appointment. Show patients that you and your staff know them and are a resource they can count on while simultaneously protecting yourself against bad debt.