As high-deductible health plans continue to rise, patients today are being asked to shoulder more of the burden and face growing out-of-pocket healthcare costs. Patient financial responsibility is making up an ever-growing share of provider revenue—20 to 30% in many organizations. That means it’s more important than ever to prioritize patient payments and be sure your payment processes are optimized.
But stubborn myths about patient payments persist, keeping many practices from making the changes they need to improve financial performance and enhance the patient experience.
To find out what those patient payment myths are—and why healthcare organizations should ignore them—we spoke with practice operations and revenue cycle management expert Elizabeth Woodcock.
Myth #1 Patients are resistant to paying at the time of service
This misconception runs deep and it causes innumerable practices to leave much-needed revenue on the table, Woodcock says.
“I remember my first job in the 90s training medical staff to collect copays, which was something very new at that time,” she says. “I was turned away from some practices by physicians who said money and medicine do not mix. We still have some of that inherent resistance, which has led to the notion that asking for payment negatively impacts customer service.”
In fact, the opposite is true, Woodcock explains.
“Patients are very open to paying at the time of service,” she says. “The key is to set that expectation and be upfront, transparent and respectful. To me, it’s more disrespectful to patients to say nothing about money and then subject them to aggressive collection practices later.”
She acknowledged that time-of-service payments are more standard practice in some areas than others, and it can be hard to be the first organization in a community to introduce a new process. But changing that mentality is imperative.
“This reluctance to collect breaks binding agreements with insurers that require practices to ask for copays at the time of service, and it is a massive revenue issue too,” she says.
Myth #2 Younger patients will pay bills online, but older ones won’t
Practices that tell themselves that their patients are too old to embrace online payments are missing an important opportunity to leverage an effective, low-cost tool, Woodcock says.
“This is very much a myth,” she says. “Older patients are fine with paying bills online and the literature shows it. My own 76-year-old mother wouldn’t know how to not pay a bill online.”
A 2015 article from consulting firm McKinsey & Company called the notion that only young people use technology to manage their health and healthcare needs “one of the most common myths about healthcare consumerism.”
When it comes to online payments, success has less to do with patient age and willingness to use it, and more to do with practice communication and marketing.
“Some practices add an online billing feature, but they don’t do a good job communicating that it’s available and encouraging patients to use it,” Woodcock says. “I would advise practices to create a thoughtful communication strategy to boost adoption and utilization.”
Myth #3 Patients do not want to leave a credit card on file
This is another common misconception, Woodcock says. In reality, consumers are used to the experience of leaving a card on file in other settings, and many appreciate the convenience.
Card on file allows practices to store a patient’s card number and automatically charge it up to an agreed-upon amount when the patient has a balance.
Woodcock also advises practices she works with to offer patients the option of leaving a prepaid Visa card on file if they are uncomfortable leaving their own card. Most patients will not choose that option, she says, but it does give them an alternative.
The success of card on file programs are also heavily dependent upon how well practices communicate with patients and set expectations, she adds.
Myth #4 Patient payment plans just create more administrative work for practice staff
This one can go both ways, Woodcock warns. At one practice she worked with recently, setting up a payment plan was an arduous manual process involving a phone conversation, a calculator, a trip to the printer for a paper receipt and a handwritten envelope. Obviously processes like that do create more work for staff—and at questionable value, she says.
“But if you can automate that process, it’s beyond worth it,” she says. “With higher patient financial responsibility than ever before, it’s a necessity.”
She also advises practices to experiment with payment plan intervals.
“It doesn’t just have to be monthly,” she says. “You can set payments to come out on a bi-weekly basis, timed with patients’ paychecks and in more manageable amounts.”
Learn more about Phreesia’s patient payment solutions.