Providing patients with estimates of their total bill before they receive medical services is one of the most powerful defenses available to head off patient dissatisfaction.
So says a team from Beth Israel Deaconess Medical Center in Boston who presented an overview of their patient cost estimating project before last month’s annual conference of the Healthcare Financial Management Association.
“We’ve been where you guys are going,” says Charles Messinger, director of training and QA for revenue cycle. Before there was Obamacare there was Romneycare in Massachusetts, which requires every resident of the commonwealth to have health insurance. “‘Healthcare for all’ is a trend of increasing complexity for the patient and for us, and that results in a backlash on providers,” he says.
Having insurance does not equate to patients being covered, at least to the level many expect. High deductibles and co-insurance are becoming the norm, rather than the exception. “It’s creating a domino effect on the patient,” says Beth O’Toole, senior director of the revenue cycle. “They’re not expecting it or not understanding it,” she adds, and the resulting frustration and anger is taken out on the provider, not on the payor or employer.
One of Beth Israel Deaconess’s strategies for avoiding that backlash has been to implement a patient cost estimating tool, which went live this summer. By estimating a patient’s total bill before they receive service, the healthcare system will achieve five significant benefits:
Recognizes the growing power of the consumer
Beth Israel Deaconess is one of fifteen hospitals in the Boston metro area, and one of five within two blocks of each other, Messinger says. “Patients are shopping around, not only for best health but also the best price, and it’s all to reduce cost,” he says. The goal is to provide more pricing transparency for the patient.
Increases patient responsibility
While the number of self-pays will drop as a result of the insurance requirements of the Patient Protection and Affordable Care Act, the number of individuals with higher deductibles and co-insurances is exploding as employers shift the healthcare cost burden onto their employees, and patients themselves will seek out the cheapest insurance possible.
Many patients are unaware of the impact of these changes. “A patient has been used to having services paid for and now they are not being paid for,” says O’Toole.
“We have to educate the patients as to the requirements of their plans,” says Messinger, and the best time to do that is in advance, not when they eventually get a bill weeks later. A patient cost estimating tool enables hospital staff to have frank discussions about the patient’s financial responsibility at the beginning of the process.
Manages sticker shock
As the trend toward higher deductibles and co-insurance payments grows, “A patient could see $5,000 deductible, as well as getting two bills, from a physician and a hospital,” says O’Toole. At the same time, payors are shifting how and what they pay for: some pay for routine services, some pay for diagnostic services, “and it’s not consistent, so a patient doesn’t know what to expect.”
The absolute worst time for a patient to find out they owe thousands of dollars is upon getting the bill. By implementing a patient cost estimating tool, a provider can better manage those conversations with patients.
Reduces patient dissatisfaction
Part of the challenge in this new climate of higher deductibles and co-insurance payments is lack of transparency by payors. “Pay0rs are unwilling or very careful about saying what is covered and what is not covered,” says Messinger. A patient calls their insurer about whether or not a medical procedure is covered, “and the pay0r says, ‘Well according to the terms of your contract, and if you’re eligible at the time of service, we will then get the claim and adjudicate it on that day and make our decision then.’ So the patient comes away with nothing.”
However, when the patient gets the final bill, any ill will generated will be directed at the provider rather than the payor. Providing a best-guess estimate for the patient in advance of service will help reduce patient dissatisfaction, at least as it is pertains to the provider.
Increase collections (self pay, co-insurance, deductibles)
“If they don’t pay their bill, it’s an increase in bad debt,” says O’Toole. The further upstream the provider knows what the patient’s portion of a medical bill will be, the better the chances to collect those funds.
Click here to read part two: Three challenges to implementing a patient cost estimating tool and how to overcome them.