By Mike Peluso, chief technology officer, Rectangle Health.
As the impact of COVID-19 continues to unfold, it is becoming abundantly clear we can no longer separate physical and fiscal care – patients cannot afford it. Provider payment systems and practice management solutions, too often regarded as an afterthought, can play a significant role in the financial well-being of patients by preventing the accumulation of debt and absorbed costs.
In the coming years, the lasting implications of the pandemic will no doubt result in a financial burden that compounds these challenges, creating an urgent need to streamline payments and administrative tasks on behalf of patients.
A Patient Need, Unfulfilled
The effect of inefficient and inflexible payments is best understood on a broad scale. According to a 2021 study by Rectangle Health and PYMNTS1, there is a significant disconnect between the payment solutions patients are interested in and the solutions they are offered. Per the study, 63% of patients are “very” or “extremely interested” in using payment plans, though only 44% were offered them. Many patients are also interested in access to digital payments, but they are not offered options either.
To put this financial disconnect into a medical equivalent, consider a patient with a heart condition who is dependent on the provider administering swift and decisive treatment. Waiting to get treatment would only exacerbate the issue and have potentially fatal consequences. Similarly, an inefficient practice management system that allows a patient to miss payments builds debt. The consequences in practice management, however, are not restricted to a single patient – others may absorb costs, too, build debt of their own and the entire practice can be put at risk.
Medical debt has a significant and well-documented impact on patient health. When patients miss payments, they are more likely to avoid their provider and assume they cannot afford to treat new health issues that emerge. A 2016 study by the Kaiser Family Foundation2 found that about three out of 10 patients reported problems getting health care they needed directly as a result of unpaid bills. Those struggling with bankruptcy are even less likely to seek medical attention when needed, but luckily a bankruptcy attorney on a site like Stoneroselaw.com should be able to help.
Investing in Financial Health
Practices that intend to address their payments issues should apply their treatment approach to patient financing. If you would invest in medical technology to treat a heart issue, invest in FinTech to treat a financial one; provide more payment options and autonomy, whatever it takes to mitigate adverse costs and promote patient retention:
- Flexible payment plans: Offering payment plans eases the immediate cost of care and is a proven strategy to help patients avoid bad debt. With most consumers voicing a preference for payment plans when their bill exceeds $1,200, flexible payment timing encourages patients to pay outstanding bills1. Digital point-of-care solutions streamline the process.
- Pay by Text: Patients in a rush or who work during daytime hours will likely prefer paying in the evenings or on weekends, and most preferably from their mobile device. With so many electronic solutions available, online or mobile options are helpful in reducing missed payments.
- Transparency: Creating a policy and offering technology that informs patients of their financial obligations from the beginning of treatment will ensure there are no overwhelming surprises at the end of treatment.
The effect, as demonstrated by a breadth of research, is significant. An American Medical Association study3 reported over 90% of patients could pay for medical treatment early or on schedule through a payment plan. At the same time, digital payment solutions help eliminate the lag time of paper billing and offer greater flexibility to fit individual patient needs.
Missed payments and inefficient practice management have been established issues with existing solutions long before COVID-19. Without providers taking action for change, the financial and medical cost to patients may come to a head in coming years. While the pandemic amplifies the impact of inefficient payments, it will also amplify the benefit of related solutions.