As America’s health insurers keep increasing the amount of money their customers must pay out of pocket before their coverage kicks in, more and more patients are unable to pay their hospital bills. As Chris Deacons writes below, hospital administrators are taking a range of actions to collect as much from those patients as possible, often before admitting them.
As recently as 2018, just 11.1% of hospital bad debt – unpaid bills patients (or their insurers) can’t or won’t pay – was attributable to self-pay-after-insurance accounts, according to researchers at Crowe RCA (Revenue Cycle Analytics). By 2021, it had exploded to 57.6%, partly due to people losing their jobs during the pandemic but largely because of the rapid increase in high-deductible health plans.
- Wendell Potter
Hospital systems around the country can be heard touting their organizations’ focus on the patient experience and patient centeredness. I wrongly assumed that these hospitals were referring to providing patient care, which after all is why hospitals exist. While patient-centered care may be one focus of these organizations, “patient-centered financial engagement” seems to be just as important for many hospitals. After all, “No margin, no mission.”
I stumbled upon an industry white paper recently that highlighted some of the ways hospital systems around the country are leveraging “patient-centric payment capabilities” to maintain their “long term financial sustainability.” The long-term financial stability of the hospitals that is – not the patients. The term euphemism is defined as a mild or indirect word or expression substituted for one considered to be too harsh or blunt when referring to something unpleasant or embarrassing. Euphemisms abound in this industry, and patient-centric payment capabilities are no exception.
But don’t take my word for it; let's hear from the hospitals themselves. Here are some best practices shared with revenue cycle management leaders from around the country. These leaders see increased “consumerism” as a problem to be dealt with, not embraced, and these are some of the ways they are dealing with it.
Pennsylvania-based Main Line Health’s patient experience director Suzanne Smith says they leverage a patient’s medical records portal asking for payment in advance: “Four or five days before a patient comes in for an appointment, we send them a message through Epic MyChart or via email stating very clearly what their financial responsibility is on the day of their appointment…[w]e ask if they want to pay that in advance, and if not, we ask if they want to speak to an employee prior to arriving.”
San Antonio-based Baptist Health System also leverages both its EHR (electronic health record) and an interactive, voice response-based phone system to nudge patients to pay their bills. Ron Wachsman, vice president of revenue cycle, notes that part of the challenge is getting people signed up for MyChart, so the system has been “very aggressive” in getting people signed up. MyChart not only gives patients access to their personal health information, “you can set up payment plans with automatic drafts…[and] [t]he default rate for patients with an automatic draft is only about 5 percent…[t]hat’s a direct reduction in bad debt for us.” Auto-drafts, payment plans…I wonder if direct deposit is next?
New York City-based NYC Health + Hospitals created a point-of-service collection process and campaign focused on a “change in culture… [so] … people now know to expect a financial conversation every time they come in,” says Michael Neofytides, the vice president of revenue cycle management there.
Pittsburgh-based Allegheny Health Network takes a similar approach and views “the point-of-service as an opportunity to educate patients so they understand how health insurance works and what they’re responsible for,” said James Rohrbaugh, the CFO and treasurer. Rohrbaugh credits this “educational approach” with improvement in cash payments because of “expectations we’ve created with patients.”
If you get a cancer diagnosis in the Fort Lauderdale area and seek care at Broward Health Medical Center, you can expect one of your first conversations to be about finances. Financial counselors meet with every new oncology patient to help them understand what lies ahead, says CFO Jennifer Connelly-Rosati.
You may be wondering how front-line hospital employees and clinicians feel about some of these practices. Just as airline attendants didn’t think they’d be selling credit-card applications, front-line nurses and technicians probably didn’t expect they’d be asking for credit card information before engaging in triage. “Your child is very ill, Mrs. Smith, yes I understand, but before we take you back can we talk about your financial situation – we prefer cash.”
Sharon Grant, the chief revenue cycle officer at the University of Mississippi Medical Center, recognizes that “[i]t’s hard for employees to ask patients for money, and patients are getting upset faster.” Gee, I wonder why.
Grant’s solution: “We’re working on role playing and scripting, but it will take a while to hardwire a culture that’s not used to asking for copays or even outstanding balances from patients.”
NYC Health + Hospitals is taking a similar approach: “We have done a lot of scripting around different scenarios and how to address barriers…. Scripts are simply a checklist to hit on during the conversation,” Neofytides said.
And who says there is no competition in health care – it’s just not the type of competition we were expecting. At NYC Health + Hospitals, patient liaisons meet with the revenue cycle learning and development team to share success stories and challenges. “We are creating an environment where facilities take ownership of collections, and it creates friendly competition,” Neofytides said.
At Main Line Health, Lankenau Medical Center, the patient registration team holds daily huddles to discuss how many copays were collected pre-visit and how many weren’t collected. Smith says this helps the registration and patient access staff to understand that those numbers equate to real dollars.
It is evident that hospitals' relentless pursuit of revenue from patients at least rivals their commitment to the patient experience and genuine care. The emphasis on "patient-centered financial engagement" reveals a troubling truth, where financial conversations often take precedence over the provision of care. These discussions rarely include meaningful access to financial assistance policies, further burdening patients in need. Hospitals across the U.S., including many of those cited in this article, continue to implement policies and application forms that create insurmountable barriers for patients seeking access to the financial assistance programs these hospitals are required to provide in exchange for their tax-exempt status. Requirements such as providing tax returns, obtaining Medicaid denials, disclosing patient bills, and demanding Social Security Numbers pose significant obstacles that prevent patients from accessing the financial support they deserve; but of course, that is the intent.
This shift toward prioritizing revenue over patient well-being undermines Americans’ waning trust in the health care system. It is disheartening to witness the erosion of compassion and empathy as hospitals focus on meeting financial targets. It is downright maddening to witness these human emotions being deployed as revenue enhancing tools.
Chris Deacon, JD, is a health care executive and consultant recognized for her advocacy for transparency and accountability. She previously ran New Jersey's public sector health plan, covering 820k lives.
Susanna Patterson July10
When I opened this email and saw the familiar "Pay Now" demand, I assumed that it was from the M Health Fairview "healthcare" conglomerate, demanding payment for some upcoming appointment that I had NOT requested, or for some hospital or clinic services I had recently received that had not yet been billed.
With our Medicare and supplemental insurance, there is no charge to us for visits to our primary care physician. Yet every time we make an appointment with him, M Health Fairview sends us an "appointment reminder," DEMANDING that we pay them $45. There is a $45 co-pay for an appointment with a specialist but no co-pay for a visit to our primary care physician.
We also get PAY NOW demands for various imaging or surgical procedures -- even though we have not yet received a bill for them, nor will they tell us what the amount is or what, specifically it is for.
Blaming the insurance industry for copays and deductibles misses the point. Copays and deductibles exist only because of an effort by whomever is paying for the health coverage to reduce paying higher premiums. It is simply cost shifting. If the cost of care was not growing at 2x the rate of inflation, perhaps employers could adsorb more of the premium costs. The issue is cost of care, was cost of care, and will be cost of care. You have to look at how the healthcare provider industry is conducting their business, using their monopoly power to drive up costs, and ignoring their obligations as healthcare organizations to their communities.
Copays were established to reduce unnecessary utilization - something that would make someone think before running to a doctor for every little thing. Not unreasonable - the copy is reasonable.
Deductibles is a concept of making the policy holder responsible for the care and maintenace of the insured item - it is a feature of property and car insurance, like maintain your brakes because you're going to pay for the first $X of the repair costs after the accident. However, applied to health insurance it is a cost shifting tool that hits lower income individuals hard.