A significant proportion of patients want increased flexibility in payment and a range of options for communication.
2022 was the worst financial year on record for healthcare organizations since the start of the pandemic, with higher labor costs and expenses per provider full time employees (FTEs). It’s a scenario that intensifies the need to capture all payments as fast as possible—in particular, out-of-pocket payments which are the hardest to collect. Yet many physician groups struggle with the art of patient financial engagement.
One out of four patients says the experience of paying for healthcare services has gotten worse in the past year, an Experian survey found, and nearly as many have considered changing providers because of it. The survey also notes three out of four consumers want digital options for payments. A significant proportion also want increased flexibility in payment and a range of options for communication.
But there’s more to activating patient financial engagement than sending a text/email or rolling out new options for payment and account management. It necessitates a thoughtful approach—grounded in behavioral science—around how to communicate with patients, how often, and through which mediums. Leading physician groups also factor in the likelihood of payment, preferences by population, and how to increase their staff’s comfort level in adopting new techniques. There is no silver bullet when collecting patient payments, so when physician groups don’t address all these areas in a patient-friendly manner, they will only achieve collection rates in the single-digits to mid-teens.
Here are three ways physician groups can more effectively encourage patients to their bill by leaning into a behavioral science-based approach.
1. Make it easy for consumers to manage their financial responsibility for care. Psychologists know: A consumer’s perception of their financial health affects their mental health. It also influences decisions around healthcare and healthcare payment, including whether to seek care and how quickly to pay their bill. As more consumers feel the pinch of inflation, they are losing confidence in their ability to pay their healthcare bills, with 43% of consumers saying a bill of $249 is the maximum they could afford.
It's one reason why empowering consumers to take action by making the patient financial experience easy to access, understand and navigate is critical. This includes:
One northwest specialty provider group increased its collection percentage from 40% to 63% by adopting text-to-pay, an intuitive mobile experience and the ability for patients to manage all payment options on their own.
2. Avoid digital fatigue and decision fatigue by establishing the right cadence for messaging. Studies show rates of decision fatigue—the exhaustion that comes with making decisions over and over—increases when consumers grapple with financial challenges. In fact, 71% of consumers say they have ignored emails and messages from service providers due to economic and social pressures. Digital fatigue, which comes from spending too much time looking at screens, affects 64% of consumers. For physician groups, this makes establishing the right cadence for financial communications vital to securing engagement and protecting patient satisfaction. Consider the following:
In our experience, 48.8% of patients who click a payment link to our platform go on to pay their bill. For a physical therapy group in the northwest, incorporating a digital-first approach helped improve days in accounts receivable by 45%.
3. Craft the right messaging to spark action. Consumers who miss the payment due date are more likely to take action quickly if the communication states “past due,” behavioral scientists have found. Meanwhile, patients who call with questions about their out-of-pocket cost are highly likely to pay at least a portion of their bill if staff ask for payment once the information is clarified. The key is to make staff comfortable with making the ask, such as by providing scripting that staff can leverage during those encounters.
It's also important to view digital communications with the consumer in mind, looking for ways to ease convenience and eliminate confusion. For one radiology group, inbound calls decreased from 15% to 12% after adopting a digital-first approach designed to anticipate consumers’ questions and answer them on the first screen they see. Text messages also should be short—the length of just one text bubble.
Relying on evidence-based engagement
There is an art to patient financial engagement, but there is also a science behind triggering consumers to take the right action at the right time. By leaning into a data-driven, behavioral science-based method of engagement, physician groups can most effectively collect balances due while protecting patient relationships.
Tom Furr is CEO and founder of PatientPay.