By Mark Snow
Healthcare providers are facing a triple threat regarding patient payments:
One: In recent years, traditional benefits plans have forced patients to accept more and more of the rising costs of healthcare. In November 2008, Mercer, the HR consulting firm, reported that the average annual deductible for an employer-sponsored PPO exceeded $1,000. This was double the 2007 average of $500, an amount that had held steady since 2001. Also in 2008, healthcare actuarial firm Milliman predicted that employees would see nearly a 15 percent increase in the amount of money coming out of their paycheck to pay for healthcare in 2009.
Two: The nation's recent economic downturn has made it more difficult for patients to pay their share of provider costs, thus increasing outstanding provider debt. For example, according to Fitch Ratings - December 2009 For-Profit Hospital Industry Quarterly Diagnosis, for-profit hospitals saw their bad debt expense as a percentage of revenue rise sharply during the third quarter of 2009 - from 19.4 percent in 2008 to 21.2 percent in 2009. The international ratings agency predicted this trend was not likely to abate for several more quarters.
Three: With President Obama's signing of the Patient Protection and Affordable Care Act on March 23, 2010, healthcare coverage will be extended to 32 million Americans who currently lack it. The percent of the U.S. population that has health insurance will increase from 83 percent to approximately 95 percent. So millions of additional people will be receiving healthcare services and be responsible for paying for some of their care.
Healthcare providers should view the new healthcare legislation as an opportunity to change the way they bill patients, using a system that is more accessible, reliable, technologically current and has a proven track record: electronic bill presentment and payment - EBPP (also known as eBilling and ePayment).
While EBPP has obvious benefits - no paper, no postage, no waste - it also has other, even more compelling, pluses. Here are four reasons why more and more healthcare providers are turning to EBPP:
Reason #1: Increase in online financial transactions
More people are doing business online, such as filing income taxes and paying bills. Last year, Fiserv, a global financial services technology provider, announced results of a survey that found that a total of 69.7 million households, representing four out of five households with Internet access, now use online banking services, primarily to access balance and account history and transfer money between accounts. In addition, 64.4 million households pay at least one bill online, either at a bank Web site or directly at a company Web site.
Reason #2: Increasing collections, decreasing bad debt, reducing costs
For healthcare providers, the time spent on collections continues to grow as their staffs become more intimately involved with billing and collections. This is a major incentive to move toward EBPP as a better way to do business.
For the provider's staff, the list of EBPP benefits is long. Solutions can minimize work in the provider's accounting cycle, often eliminating the need for additional staff. Patient payments are deposited directly into the provider's bank account, and provider staff is automatically alerted by e-mail notification of each payment. If an EBPP solution is also integrated with statement printing and mailing services, the patient can choose to receive bills only through e-mail, eliminating postage and material costs. Electronic communications improve billing accuracy, too, by eliminating many staff "touches" in the accounts receivable process, yet still allow staff access to all bills through the secure online portal.
Most EBPP systems are easy to set up. In many cases, the provider does not have to change its IT system, and no capital investment is required.
Reason #3: Streamline the revenue cycle, improve patient relations
Communicating with patients electronically via e-mail and through a Web site provides immediate, interactive and convenient communications with patients and results in a more effective flow of information. EBPP services allow patients to set up automatic recurring payments using debit or credit cards, so the consumer does not have to fill in personal and account information each time they pay a bill. And patient responsibility estimation can be provided at the point of service, accelerating patient payments. From a patient relationship standpoint, this timely, efficient communications approach is far more likely to benefit long-term patient-provider relations than mailed invoices and telephone follow-up.
Electronic bill presentment and payment solutions can also introduce greater security and assured compliance to patient payment transactions.
Reason #4: "Going green" is not just for PR
For much of corporate America, eco-friendly practices are more than a public relations initiative; they have become a business imperative. No longer seen as just an Earth Day publicity opportunity, "going green" creates business efficiencies and greater profitability in addition to environmental benefits and positive public perceptions. EBPP not only reduces the use of paper, postage, ink and envelopes, but also reduces energy use and human resource utilization.
For those healthcare providers that struggle to collect monies owed them and are trying to do it in the traditional way, EBPP is no longer the wave of the future; it is the most cost-effective way to accelerate patient payments today.
About the author
Mark Snow is chief marketing officer and director of business development, PSC Info Group. For more information on PSC Info Group solutions, click here.