How is the patient journey affected when people have an estimate of the cost of care before their visit?
Providers are under increased pressure to publicly disclose the prices of the products and services they offer, driven in part by recent federal price transparency regulations. For example, on Hospital Price Transparency Rule went into effect on January 1, 2021, and aims to make it easier for consumers to shop and compare hospital prices, and estimate the cost of care before going to the hospital. The rule states that hospitals’ standard charges, including the rates they negotiate with insurance companies and the discounted price they are willing to accept directly from a patient if paid in cash, must be publicly available, free of charge and presented in a user-friendly display .
While the federal rule applies to hospitals, it highlights the increased awareness and growing demand for price transparency in all care. Adding to consumer awareness of price transparency is Law without surprises, which went into effect on January 1, 2022. This act aims to protect consumers from excessive out-of-pocket costs when receiving emergency and non-emergency care from out-of-network providers at in-network facilities. As more providers strive to comply with the new laws, healthcare consumers are likely to gain increased awareness of price transparency and expect more transparency from their providers, regardless of care setting.
For ambulatory practices, providers have an opportunity to get ahead of this evolution in healthcare consumer expectations by offering patients a new type of care journey that includes an option to pre-assess service costs.
Two patient journeys
To understand the difference that pre-service cost estimates can make for patients, providers, and staff, consider two separate journeys that patients can take: One is a more traditional route where the patient only pays their co-pay during the service. The other trip provides the patient with an estimate of the cost of care at check-in.
In traditional travel, the patient shows up for an appointment and upon check-in at the front desk is asked to provide the co-pay amount, without taking into account other fees that may be paid in advance. Insurance companies have shifted their plan designs from copay-driven plans to high deductible health plans, with deductibles routinely in the range of $3,000 to $5,000 (and sometimes up to $12,000). When the patient is on a high-deductible health plan, the provider collects $0 before or immediately after the service is rendered, leaving the remainder at risk. After the visit is complete, a staff member submits a claim to the patient’s insurance company, the patient is billed the balance due—and then begins the waiting game for the provider to receive payment for the funds owed.
Some patients can pay their providers the day they receive a bill; however, the far more likely outcome is that payment is delayed because patients typically prioritize rent payments, car payments, groceries, and other monthly expenses over medical bills. Surprise bills can be especially problematic for patients who have high-deductible plans and learn they owe significant out-of-pocket costs. Surprise bills can also be costly for providers, who often have to devote valuable staff resources to debt collection and chasing up early payments.
In contrast, consider the patient journey, which has the option of taking advantage of digital tools that estimate out-of-pocket costs before the visit, based on expected visit type and past history. With this approach, providers can collect not only the co-payment due at check-in, but also the likely estimate of out-of-pocket costs. Additionally, staff can store the patient’s credit card information during the service, then automatically charge the balance due once the claim is resolved.
For patients, this greater price transparency can lead to better, more informed decision-making and make it easier to budget for medical expenses. For example, when informed in advance of the expected costs, the patient is in a much better position to decide whether they should proceed with treatment now or can postpone it to a future date and budget accordingly. Having cost information in advance of treatment also allows patients and clinicians to have a frank conversation about treatment options and timing.
Providers who collect the patient’s full payment at the time of service receive their money sooner and also relieve staff members of time-consuming collection efforts. Fewer accounts have to be turned over to collection agencies, which means more collections stay in the practice.
Pre-service cost estimates are an essential component of the broader pre-service provider registration process and facilitate a more automated patient journey that provides greater price transparency, reduces financial friction for patients and increases the likelihood of rapid collections.
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