Manual processes and big bills add up payment lags.
Paper and confusion still dominate the revenue cycle.
That's a key finding from the Trends in Healthcare Payments Ninth Annual Report: 2018 from InstaMed, which includes quantitative data from more than $396 billion in healthcare payments processed on the InstaMed platform, along with survey data from consumers, providers, and payers.
Payment lags and an increase in consumer responsibility are combining to make it harder for hospitals to collect payment. The report shows that 77% of providers say that it takes more than a month to collect any payment.
Meanwhile, 69% of providers saw an increase in patient responsibility in 2018 compared to 2017. As patient responsibility increases, the likelihood of patients being able to pay their bills decreases. According to the report, 56% of consumers would not be able to pay a medical bill of more than $1,000.
Those statistics bolster findings from earlier this year suggesting that hospitals may not be making enough use of payment plans for patients, some of whom use payment plans even for out-of-pocket expenses as low as $50.
Confusion, surprise for consumers
On the consumer side, the report showed confusion and surprise, along with an inability to pay their bills. For instance, it found that a whopping 93% of consumers were surprised by a medical bill in 2018, and 70% are confused by their medical bills.
Surprise medical bills spell trouble for providers. Not only do patients blame hospitals for their surprise medical bills, but getting such a surprise can actually drive patients to a competitor for future services.
Consumers are also confused by communications from their insurance companies, with 71% saying they're confused by their Explanation of Benefits.
One remedy for surprise and confusion around medical bills is to offer patient cost estimates ahead of the service. Price transparency was a major topic of conversation among revenue cycle leaders last month at the HealthLeaders Revenue Cycle Exchange in Ojai, California.
Paper still dominates
Despite the increase in online bill pay and other electronic options, paper still dominates the hospital revenue cycle, the report shows. That's despite consumers—and providers—wanting electronic options.
The report found:
- 72% of consumers want e-statements for health plan premium bills, yet 42% of consumers cannot receive e-statements from their health plan
- 91% of providers still receive paper checks from one or more payers, yet 82% of providers prefer electronic funds transfer from payer
- 90% of providers leverage paper and manual processes for collections
Alexandra Wilson Pecci is an editor for HealthLeaders.