In recent years, reports like Becker’s ASC Review have noted that healthcare costs, including out-of-pocket maximums and deductibles, have climbed nearly 30 percent. These rising costs have created challenges for both healthcare providers and patients.
On the provider side, revenue cycle management becomes the main issue. The same article noted that 82 percent of healthcare providers and 92 percent of hospitals have seen their profit margins shrink using traditional collection methods. And on the patient side? With more of the financial burden of healthcare on their shoulders, consumers aren’t willing to shrug off poor experiences — from how appointments are made to how patient payments are handled.
So, what’s the solution? Using psychographic segmentation to better understand patients’ needs and preferences for paying their medical bills can help address both challenges.
Accelerating patient payments
Since passage of the Affordable Care Act — and the ensuing rise of healthcare consumerism — hospitals and other healthcare providers have recognized the importance of patient experience.
Healthcare organizations are making progress on meeting consumer expectations on the front end of the experience. A growing number of providers offer omni-channel appointment scheduling, for example, allowing patients to schedule a visit to the doctor on the phone or on the web. And EHRs and patient portals have enabled seamless access to personal health data. But when it comes to one aspect of the back end of healthcare experiences — namely patient payments — there appears to be a disconnect.
Improved price transparency at the beginning could help. Citing a healthcare payments report, American Journal of Managed Care (AJMC) points out that 92 percent of consumers want to understand their payment responsibility prior to an appointment.
But that’s not the only hurdle healthcare providers need to overcome. AJMC notes that HCAHPS results show an average 30 percent decline in patient satisfaction in experiences after discharge. “A negative payments experience could impact a patient’s overall impression of a healthcare organization, even if the rest of their experience was positive,” AJMC says. Where can hospitals and medical practices align their billing practices with patient expectations?
- Offer paperless options — Nearly 90 percent of healthcare organizations mail paper patient statements, but 52 percent of patients prefer electronic billing. “This is creating a substantial divide because patients are eager for their healthcare providers to leave paper behind and have come to expect a high-level of automation based on their other service and retail experiences,” says an article on PhysiciansPractice.com.
- Make bill payment convenient — Convenience is high on the healthcare consumer’s agenda, and not just for providers’ locations and office hours. Enabling bill payment in different ways — online, over the phone, by mail — satisfies this expectation, allowing for hassle-free payments.
- Inform patients of payment plan options — Naturally, interest in payment plans is tied to the size of a medical bill. A survey of healthcare consumers who had an in-patient hospital stay or an emergency room visit in the past year revealed that nearly 52 percent of patients would want a payment plan option for bills that are $1,000 or higher. The survey also found that roughly 57 percent of patients interested in payment plans would want to be given the option prior to or at the time of service, while almost 36 percent would prefer to receive the payment plan offer with the first bill.
Leveraging psychographic segmentation & patient engagement
What else can help healthcare providers keep patient payments flowing? The combined power of c2b’s psychographic segmentation model and PatientBond’s patient engagement platform can help.
Psychographic segmentation looks at how individual healthcare consumers approach health and wellness, including their beliefs and attitudes as well as their communication preferences. With these insights, hospitals, urgent care centers and other healthcare organizations can develop more effective collections strategies. What can psychographic segments tell us?
Across five segments — Self Achievers, Balance Seekers, Priority Jugglers, Direction Takers and Willful Endurers — it is the Willful Endurers who are more likely to strongly agree or agree with the statement, “I have a hard time paying my healthcare bills.” (39 percent). Not surprisingly, then, Willful Endurers are also more likely than other segments to want a payment reminder “greater than 30 days AFTER it is due.”
Or, look at the preferred methods for making an out-of-pocket payment for a balance due. The average percent of patients who want to pay online via a credit card is 43 percent across all segments. However, there are some variations among the different segments.
- Self Achievers and Willful Endurers are more likely to select online payment via PayPal than Priority Jugglers and Direction Takers.
- Priority Jugglers and Direction Takers are more likely to choose mail-in payment than Balance Seekers and Willful Endurers.
Understanding what individuals want from their healthcare experience — even as it relates to billing — is a good start, but a patient engagement platform like PatientBond puts that insight to work. For example, it enables automated payment reminders via different channels, including email, interactive phone call or text, with messages that have been adapted to address the unique perspective of a person’s psychographic segment.
This approach yields many dividends. In addition to creating the seamless, personalized healthcare experiences that consumers expect, c2b's psychographic segmentation model used in concert with PatientBond's automated payment reminders have led to a daily collection rate for outstanding balances that is 4X higher than traditional collections. Likewise, it produces a digital engagement rate that is 3X higher than manual phone calls. For a 5-location urgent care center, the efficiencies of faster collections, fewer hours spent by staff on payment follow-up and cost savings from fewer paper statements yielded $55,000 in costs savings annually.
No one looks forward to paying bills, but with the right approach, hospitals and other healthcare providers can make the experience as painless as possible for everyone concerned. Download our whitepaper to learn more about our psychographic segmentation model and how it can improve patient payments.