As workers in many states head back to the office, hospitals and health care groups need to adjust to the new normal. Yes, some patients will still contract COVID-19 and end up visiting the Emergency Room or a hospital in order to get tested and treated. However, other parts of hospitals and clinics are opening back up, and employees on all levels – particularly those in the billing and finance departments – need to be ready for the new normal. Here are some financial predictions, as well as what you can do to prepare.
Understanding Patient Behavior
According to sources, “Kent Ivanoff, who worked as executive vice president in the U.S. Card Division of Capital One Financial during the 2008 Great Recession, shared four key lessons learned that may help the healthcare industry prepare for what’s to come.”
“Payment hierarchy. Typically, consumers pay their mortgage, then car payments and then credit card debt. However, during the 2008 recession, credit card payments moved up in the hierarchy. While healthcare bills are not likely to move up in the payment hierarchy, it demonstrates to health system leaders that more flexible payment options, like credit cards offer, will make it more likely for consumers to pay off their bill.
“Payment delinquency rates. Credit card delinquency rates lasted more than twice as long as the stock market contraction in 2008, Mr. Ivanoff said. This shows that consumers felt the financial hit longer than those who invested in the stock market. As a result, health systems should plan on a protracted period of reduced payment rates, with far fewer patients paying their balance in full.”
“Insurance coverage. During the 2008 recession, unemployment and the rate of uninsured individuals didn’t peak until October 2009. With the ACA now in place, Mr. Ivanoff said he expects a “softer landing” in terms of people losing their insurance coverage amid the COVID-19 economic downturn. However, while more people have health insurance, they also are more likely to have high deductible plans. Mr. Ivanoff said that healthcare systems should be aware that these high deductible health plans are likely to persist.”
“Macro-economic recovery time. With the 2008 Great Recession, the stock market began to rebound in March 2009; however, the unemployment rate didn’t peak until October 2009, Mr. Ivanoff said. This reveals that consumers felt the effects of the recession for much longer than the markets. The depth of the COVID-19 pandemic impact is more acute, with twice the unemployment rate as the 2008 recession in about a quarter of the time. This indicates that consumer payment rates could suffer well into 2021.”
Improving Hospital Revenue
“Amid economic uncertainty, it is important that patients feel that they have flexibility and tailored options for paying their bills. ‘One thing that becomes increasingly clear in a recession is that a one-size-fits-all approach cannot work,’ Mr. Ivanoff said. VisitPay offered five steps that will help hospitals support patients experiencing different financial and clinical situations and collect much-needed revenue:
“1. Maximize self-servicing. When patients have self-service payment options available to them, it not only empowers them to make payments toward their bills, but it can also cut down the burden on staff in the billing department or call center.”
“2. Communicate the message on payment options purposefully. The message should be communicated purposefully depending on the patient’s financial and medical position, Mr. Martino explained. This means showing empathy for those who need help and sending timely reminders to those who are able to pay.”
“3. Make precise payment offers digitally. Sending patients payment terms that reflect their current financial situation is one way to ensure patients are able to pay off their bill, whether that is in full or in portions.”
“4. Target patient payment relief options appropriately. It is important to tailor and present them with the best [relief] options, instead of confusing them by placing 20 payment plans in front of them.”
“5. Balance patient satisfaction and payment rate. To get a better understanding of patient satisfaction with the financial experience, health systems should routinely survey patients and conduct performance reports. When you’re offering a strong consumer experience, you’re going to engender loyalty, which should then result in greater payments.”
“As health systems work to navigate the financial challenges brought by the COVID-19 pandemic, they should consider implementing a patient payment solution that includes flexible, tailored payment plans to boost patient satisfaction and help protect their bottom line.”
One Other Tip
In addition to all of the above, there’s something else that you can do to help your hospital get through these tough financial times – file Federal ERISA appeals on your aged claims. These appeals ensure that those overlooked commercial health insurance claims, no matter how few of them there are, get paid. They may make up only a small percentage of your overall claims, but every penny counts. If you’re ready to clear up those aged claims using the Federal ERISA appeals process, contact us today.