Putting technology to work in health care collections

Casey Williams: ©RevSpring

Nearly half of Americans have $500 or less in their savings accounts. More than 100 million Americans carry debt related to obtaining health care.And, perhaps, the most sobering news of all:

Healthcare organizations are finding it harder to collect patient financial responsibility, according to an analysis from Kodiak Solutions. The analysis of patient financial transactions from more than 1,850 hospitals and 250,000 physicians nationwide showed a sharp decline in the patient collection rate, from 54.8% in 2021 to just 47.8% in 2022 and 2023.

Total payments made on the nearly 3 million fully resolved medical claims from commercially insured patients during the two-year analysis period were about $5.2 billion. However, the cash providers received was barely a quarter of the total charges, which were $21 billion at the time.

This is hardly breaking news for health care financial leaders but it bears pointing out as part of a larger point: health care is reaching a tipping point. The portion of revenue that patient responsibility payments represents is, quite literally, the crucial margin necessary to deliver on health care’s mission. Without that margin, there can be no mission.

It’s critical to apply intelligent technology solutions to these challenges. While no single technology can magically solve a crisis, sophisticated technologies are improving the financial picture for many health care organizations, both large and small, throughout the country today. They’re also helping to improve patients’ ability to pay for their health care by addressing affordability issues. Solutions that leverage data intelligence clarify each patients’ capability to pay—and their preferred communication and payment styles—leading to clearly defined, individualized pathways that drive payments. The results are remarkable, with patients often paying faster and sometimes paying in full when presented with modest discounts.

Here’s an overview of four top technology solutions for delivering better financial outcomes in healthcare.

Price estimates

Price estimation technology has come a long way in the past decade. Now, with enough data and intelligence on the front end, it’s possible to provide a fairly realistic estimate of what procedures will cost a patient after insurance has paid its share. And when the estimate is shaky, it’s even possible to give patients an estimate confidence score. When the confidence score is high, providers are empowered to ask for a significant portion of the payment prior to the procedure. When it’s lower, patients may be asked to pay a lower portion of their responsibility upfront.

The point is that health care is expensive and must be made affordable for most patients. Consumers should not be left in the dark until the moment the statement arrives. Just like with any major purchase, most people need to plan how to meet a large expense that’s not part of their regular budget. And talking with patients about costs before they are incurred can help reduce the “sticker shock,” particularly if providers bring empathy and realistic payment options to the discussion.

Tailored payment options

Providing patients with a realistic pathway to pay medical bills can mean the difference between receiving all, or most, of the revenue owed—or none at all. When faced with a potential outlay that far exceeds their ability to pay, many people must file for bankruptcy. Or simply decide not to undergo an important procedure at all.

The stakes are that high for many people.

Rather than push patients to the brink of physical or financial collapse, technology now allows providers to see how much a patient can realistically pay. They also can use a propensity to pay score to gauge a patient’s willingness to pay each month. That information is crucial for formulating the best payment plan terms for each patient. Rather than consigning all costs to bad debt—and wasting countless staff hours beforehand trying to collect money that patients cannot afford to pay—offering a tailored payment option dramatically increases the rate of collection. In fact, 70% of patients say they will pay sooner when presented with a payment option that best fit their ability to pay.

Pay their way

How patients pay is nearly as important as how much they are asked to pay. Just like in every other aspect of consumer engagement, patients expect convenience, flexibility and control. Providing patients with a variety of payment options—text to pay, online payment portals, pay by phone and even traditional paper statements received in the post—reduces friction for patients and often reduces collection costs for providers.

Offering patients the opportunity to store their credit or debit card information in a highly secure online environment is the ultimate in easy payments—for them and you. When patients choose this payment method, a simple text is all that’s needed each month to let a patient know the amount that will be billed to their card on file. Consumers are increasingly paying this way for many goods and services. Why should paying for health care costs be any different?

Self service

Smart technology should not simply be reserved for the financial aspects of patient engagement. Technology also can help foster patient loyalty by making it easy for patients to engage with your health care system. From online price shopping and scheduling appointments to completing registration forms and providing post-care feedback, patients expect the technology to match the ease and convenience they experience in every other realm. When you meet those expectations, patient loyalty is definitely strengthened.

The bottom line: It’s all about affordability

Challenges in health care are real, with growing costs for providers and affordability issues for patients. But technology is rising to the challenge and making a critical difference for providers willing to do things differently.

Just like colleges and car dealerships offer customized payment terms, health care collections must be structured with affordability top of mind. Few consumers can buy a college education, or even a new car, with cash on hand. Neither can they afford to pay for large, and often unplanned, medical costs. This is why it’s crucial for health care to offer empathetic, affordable payment pathways that meet patients where they are.

With the help of data intelligence and smart applications, it’s possible to understand patients and to provide tailored payment plans that fit their budgets and propensity to pay. Today’s technology also can be harnessed to offer payment opportunities at multiple junctures throughout a patient’s healthcare journey. This means breaking down payments into smaller, more affordable chunks. Not only will this generate faster payments and increase yield, it will help patients assume more responsibility for their health care costs.

Embracing new financial engagement solutions that technology makes possible not only will improve the financial outlook for healthcare organizations, but will also drive affordability and patient convenience, satisfaction and loyalty.

Casey Williams is the senior vice president, patient engagement & payment applications, at RevSpring. Williams has over twenty years of experience in developing intelligent patient communications and payment applications that build a strategic relationship with clients and their patients. He’s currently responsible for the payment applications technology and strategy in processing over $7.5 billion in patient payments annually. He has held various leadership positions within health care trade organizations such as HFMA, AAHAM and COPAM.