Today, patients’ out-of-pocket financial responsibility for their care determines a larger percentage of provider revenue than ever before. Between rising healthcare costs and evolving consumer preferences, provider organizations are looking for new ways to maximize their profitability.
But even in the face of these challenges, there are proven, effective methods for improving payment processes and collecting more quickly. The short answer? Patients want convenience—and providers who implement modern, digital payment options are poised to thrive.
Why are flexible payment options important?
Patients are increasingly ditching traditional payment methods for more convenient alternatives. In 2020, a U.S. Bank survey found that 64% of healthcare consumers paid their medical bills in person at their provider’s office. The following year, that number shrank to just 44%.
No doubt, the pandemic has accelerated a shift in how patients pay their bills. The popularity of digital payments is taking off, with more than half of U.S. Bank survey respondents saying they prefer the ease and convenience of making contactless payments for their healthcare.
Online portals, mobile apps and mobile wallets are among the most favored of those contactless choices—all of which allow patients to pay their medical bills safely and securely from a phone, computer or tablet. In fact, nearly two-thirds of patients cite digital and tech-enabled options as their preferred way to pay.
For healthcare organizations, the ability to offer flexible payment options has become a key driver of patient retention and satisfaction. More than three-quarters of patients say they want their providers to offer more digital payment modalities—and nearly 60% view their providers more favorably when a contactless payment device is made available at the point of service.
Here are three ways that offering flexible payment options can benefit your healthcare organization:
1. Meet patients’ financial needs
Here’s a sobering statistic: According to Health Affairs, one-third of patients whose balances exceed $200 do not pay them in full.
Flexible payment options can help healthcare organizations solve that problem. Payment plans, for instance, can split patients’ large balances into manageable monthly installments. In fact, more than 80% of patients say they’re likely to choose recurring payments if their provider offers that choice, and more than 9 in 10 say they would pay their bill in full if given a lump-sum discount.
That’s a boon for providers, too. By moving payments to the front end of care, healthcare organizations can increase revenue and reduce bad debt. Better yet, organizations that offer flexible payment methods are well positioned to boost patient loyalty, especially as healthcare consumerism grows.
2. Make payments easier
Thanks to the speed and simplicity of digital modalities, patients are increasingly paying their bills hassle-free from their home computer or mobile phone—and for most of them, going online is the easiest way to pay.
About 1 in 5 patients say the pandemic has increased their reliance on digital and contactless payments, and nearly half of patients say they pay their medical expenses more quickly when notified digitally—whether by email, text message, app or automated phone call. By comparison, just 16% of patients say they pay more quickly when notified by regular mail.
Indeed, digital notifications work because they leverage consumers’ existing bill-paying habits—and that’s good news for providers’ bottom lines. With technology, providers can send billing reminders through the platforms their patients already use. The end result is faster collections, fewer unpaid balances and a more patient-friendly payment experience.
3. Reduce paper waste
How many billing statements does your healthcare organization typically send before a patient’s balance is fully paid?
If you’re using regular mail, those hard costs can add up. The cost of healthcare billing and insurance-related activities is nearly $500 billion annually in the U.S. alone, and much of that expense comes from paper invoices. In addition, time spent on patient billing is estimated to account for more than one-third of all U.S. healthcare expenditures.
Offering flexible payment options can help healthcare organizations “go paperless,” eliminating the need to repeatedly send paper billing statements. Providers with card-on-file policies, for example, can use patients’ stored credit card numbers to process their outstanding balances after insurance claims are adjudicated. Moreover, many online payment solutions have built-in email billing reminders, allowing providers to collect and solicit payments from a single platform.
The takeaway? By using technology to automate and digitize patient payments, healthcare organizations can increase efficiency, decrease billing costs and give staff more time to focus on enhancing the patient experience.
Learn how Phreesia can help you collect respectfully and consistently at the time of service and give patients the modern, flexible payment experience they want.