It’s no secret: healthcare is expensive.
While CBS MoneyWatch reports that healthcare costs are not rising quite as quickly as they have in past years, they are still increasing at a steady pace, resulting in a 6.8 percent spending increase in 2015 and an estimated 6.5 percent increase in 2016. These totals, however, are decidedly lower than the 11.9 percent spending increase of 2007.
It would be nice to say the slowed rate of spending was due to lower costs and greater efficiency in the healthcare industry. Some of it might be, but a study performed by the PwC Health Research Institute suggests that one of the factors behind the change is employers and insurers passing a higher percentage of the costs on to the patients. Increases in deductibles and co-payments are pushing people to put off medical procedures until absolutely necessary or to avoid them altogether.
So what does this mean for your medical practice?
It means that patient payments and billing plans will become a major part of the lifeblood of your medical practice, if you hope to continue to attract patients and provide quality care.
The fact is that most patients don’t want to put off necessary procedures, but they don’t have a choice. With deductibles as high as $1,200, $2,500, and more depending on the government-sponsored (Medicaid, Medicare, Marketplace) or employment-based plan, some patients simply don’t have any financial options to get the treatment they need.
To ease this burden, medical practices have started thinking smarter about patient payments, utilizing recurring billing systems to create financially sustainable plans for patients who can’t afford high treatment costs up front and who are uncertain about how to address the high price tags for treatment. By utilizing a recurring billing system, however, many medical practices can proactively address patient concerns, setting up payment arrangements before treatment based on prequalification and providing a real solution to an ever-growing problem—making healthcare affordable for everyone.
If your practice doesn’t currently have policies and technology in place to setup recurring billing payment plans, consider the following potential benefits:
Improved patient relationships.
Nobody wants to be in debt, and most patients do want to cover the cost of their medical care. It’s up to the medical practice to make this a realistic possibility for them. By providing patients with a practical solution to high deductible or co-payment costs, your medical practice stands to gain not only the funds owed for performing any treatment procedures, but also the trust and gratitude of patients who are happy to be able to put medical issues behind them.
- Be honest immediately. Let them know the costs and financial impacts they’re facing.
- Offer all the details. Make sure your patients know the drawbacks, obligations, and penalties associated with a payment plan.
- Be available and communicative. Create an internal office procedure to contact patients on recurring billing plans regularly to remind about payments and discuss costs.
Offering your patients pragmatic solutions and honesty will go a long way in reducing bad debt and securing an easy relationship between practice and patient—even where high outstanding dollar amounts are involved.
More efficient financial processing.
While it would be great if patients could pay all outstanding bills up front or remember to call in to pay each month, we all know that reality is a bit more complicated. And people forget. They get wrapped up in obligations and family life, and then outstanding medical costs can be easily forgotten or lost. But with recurring billing, where the patient gives permission to keep a card on file that is charged regularly each month, the process is much more easily managed. The charge is regular, predictable, and automated, requiring no action on either the patient or the practice’s part to initiate the payment, because the agreement would have been signed up front. Of course, penalties for insufficient funds and the ability to rearrange payment dates will be necessary, but those arrangements can be easily made with an efficient system and strong support staff in the financial billing department.
And, of course, money.
Finally, recurring billing is most effective for ensuring that a higher percentage of outstanding debt is paid on time. Having cards on file with patient agreements requires patient to acknowledge, before any procedures have taken place, that they will be incurring a debt. Most patients find it harder to ignore or brush aside that obligation when a hard and firm contract agreement has been made. While some payments will inevitably fall through the cracks, as patient circumstances and resolves change, a larger percentage will be made on time in accordance with the agreement. If the arrangement is for a short timeframe, no longer than 6 months to a year, the chances of receiving overdue funds is much higher, so keep arrangements to smaller timeframes except in exceptional situations.
Juggling practice obligations and patient needs is a tricky business, but a recurring billing system that allows your practice to set up automated patient payments will alleviate some of the strain, allowing the medical professionals in your practice to do their jobs better and providing alternatives for patients who need care but struggle with the rising costs of treatment. Those costs probably aren’t dropping any time soon, so consider your alternatives now for finding a middle ground between meeting the bottom line and keeping your patients healthy.