Luckett says the hospital encourages patients to call a financial counselor to talk through the financial questions. With so many managed care plans and the offshoots of those plans, it can be difficult for a patient to do his or her own calculations. Speaking to a financial counselor is still the best way to go because the counselor can ask the right questions to find out that, for instance, a patient has a certain managed health plan and not the plan's general coverage.
"This approach, combined with an increase in our commercial payer mix, which could be attributable to a number of things like ACA and an improving economy, has led to a decrease in bad debt for our system," Luckett says.
Hospitals respond to cost anxiety
Offering cost estimates to patients can be a tricky business, because a wrong estimate can either drive patients away if it is too high or upset patients if the estimate was too low.
OhioHealth in Columbus, with 11 nonprofit, faith-based hospitals, has tried offering out-of-pocket estimates in the past but found that the accuracy was reduced by insurers' reluctance to release the necessary details about their contracts. The insurers have loosened their grip on that data in the past two or three years, however, and now OhioHealth offers a price estimator hotline. The hospital is not quite able to do real-time adjudication the way pharmacies can do with prescription drug coverage, but it is getting closer, says Jane Berkebile, system vice president of revenue cycle.
"We also are promoting consistency and standardization in our messaging to patients, so they're not told in one department that an estimate is not available and then going to another department and getting an estimate for their cost," she says. "At the same time, we are changing the culture and what the patient expects. We explain that almost everyone will pay something out of pocket, and once we have that estimate, we do ask for a payment against that estimation."
Marketing to the financial concerns of patients can be a competitive differentiator, says Sarah E. Ginnetti, director of revenue cycle at Day Kimball Healthcare, a nonprofit, integrated medical services provider that includes Day
Kimball Hospital in Putnam, Connecticut; Day Kimball Medical Group; and four medical centers. Successfully engaging patients as consumers can create an ongoing relationship, especially if you help remove financial barriers by offering financing options and payment plans, she says.
Offering payment plans with its patient financial engagement partner CarePayment, has reduced Day Kimball's bad debt expense, she says. Patients are now paying their bill sooner rather than later, which Ginnetti says has allowed the health system to keep resources focused on helping the patient rather than trying to collect.
Ten percent of all patient payments received are a result of patients enrolling in the CarePayment program, Ginnetti notes. Patient payments increased by 27% overall after Day Kimball implemented the CarePayment program four years ago, and bad debt numbers have held flat since then despite patient balances growing with the advent of high-deductible healthcare plans.
"Most things in American culture require financing now, for better or worse, and having that same option in healthcare is a huge advantage because it allows people to have a budgeted amount every month and stick to their overall budget as a family or individual," she says. "It's predictable and that makes a huge difference even if the total amount you're paying is substantial. We're trying to offer that predictability with up-front education and these financial tools."
Day Kimball Healthcare recently launched a new tool intended to provide patients with a much more robust estimate of expenses so they can make informed choices. The group also developed an infographic titled "Health Insurance Math Simplified (kinda)" to walk patients through key steps in the process, from how insurers set rates and providers get paid to how patients pay for insurance and other medical costs.
Gregory A. Freeman is a contributing writer for HealthLeaders.