Why Healthcare Should Provide Treatment Cost Information
By Kevin Lathrop, president of TriZetto Providers Solutions
As part of revenue cycle management, patient financials — the ability to discuss treatment costs at the time of service and helping patients understand why visits cost what they do — is crucial and a growing challenge in healthcare IT. Savvy healthcare consumers are demanding more information about all aspects of their medical care and are especially interested in obtaining up-front information about costs in an effort to mitigate increasing premiums and high deductibles.
Healthcare consumers have a handle on their monthly insurance premiums and deductibles, but the actual treatment cost of the doctor’s office visit often remains a mystery.
Physicians spend years developing relationships with their patients and a mystery bill may destroy that connection in a moment.
Healthcare By The Numbers
Patients face increasing healthcare costs — deductibles, premiums and prescription medications — throughout the year, though it’s most noticeable during open enrollment. Since 2015, healthcare consumers have faced a 29 percent increase in deductibles, averaging $1,800 per covered insured, according to HealthcareFinance. Out-of-pocket expenses hit more than $4,400 per person during 2017, according to MGMA.
Many healthcare consumers already feel the pinch of growing insurance-related costs, and difficulty or inability to provide patients with financial information about their treatment confounds the issue.
Expecting The Unexpected
Unfortunately, few physician offices are capable of generating patient financial information on-demand to let patients know how much they should expect to pay following a visit. Failing to offer this service, some physicians miss the opportunity to talk with patients about payment, which is extremely important considering many patients have difficulty making payments for in-office services.
Having the payment conversation is extremely important because:
- 30 percent of patients leave the office without ever paying their bill, according to MGMA.
- 60 percent of all patients never pay their medical bill once they leave the office, reports HFMA.
- 45 percent of Americans say they would have difficulty paying a surprise medical bill of $500, according to The Henry J. Kaiser Family Foundation.
Physician offices with the ability to provide an upfront cost estimate to a patient can help eliminate an unexpected bill that many people won’t be able to pay and which ultimately will have a negative financial impact on the practice. Once a patient bill enters collections, the average provider receives less than $16 for every $100 owed, according to MGMA. By the time a patient’s bill enters collections, they’ve already paid premiums and deductibles, both of which sap financial resources.
If a patient gets a surprise bill following treatment, there’s a chance they’ve already spent a fair amount of money on other medical-related expenses. Unfortunately, the provider is the final stop on this long road of patient healthcare payments.
Transparency By The Numbers
As patients take on more financial responsibility by paying more medical costs through high-deductible health plans and ever-increasing premiums, it becomes even more important for providers to explain and communicate treatment-related financial responsibilities.
Getting an accurate cost estimate to the patient before they leave is critical. Physician offices that can provide cost information prior to an appointment will have an advantage over those can’t. Patients have become much more than patients; they are also consumers who have benefitted from cost transparency.
To deliver meaningful numbers, cost estimates must be highly accurate and based on the patient’s specific benefits plan. Ideally, this estimate would be generated in anticipation of the patient’s visit or at the time of service. But getting the numbers right is only half the solution.
Ensuring the cost estimate is straightforward and understandable is key. It’s important to deliver the information in an easy-tounderstand format with clear, line-item explanations of the services and their associated costs. Finally, office staff should offer to sit down with the patient to clear any confusion that remains.
Providing an estimate of a patient’s bill is good customer service, and helps ensure faster and more complete payment. It’s the right thing to do for savvy consumers who need and are demanding more information about where, when and how their healthcare dollars are spent.
About The Author
Kevin Lathrop is president of TriZetto Providers Solutions, which provides revenue cycle management systems to providers.