Patient Financing Moves from Nice to Have to Need to Have
SAN DIEGO, Jan. 27, 2020 – U.S. out-of-pocket healthcare spend, including consumer copayments, deductibles and spending not covered by insurance, was more than $375 billion in 2018, according to the Centers for Medicare & Medicaid Services (CMS). CMS projects 43 percent growth in patient out-of-pocket financial responsibility between now and 2027. Increasing consumer responsibility for medical costs points to the fact that long-term patient financing — at least 12 months — is now a “need to have” benefit health systems should offer.
In the five years that ClearBalance® has tracked consumer perception of healthcare costs, an average of 95 percent of survey respondents have said it’s very important that their health system offer long-term financing. “Using ClearBalance patient financing to augment their internal financial policy gives health systems the resources to help make care affordable for their community,” says ClearBalance President and CEO Bruce Haupt.
Today, the financial experience consumers have with a health system affects their decision about whether they will return the next time they need care. According to the ClearBalance 2019 Healthcare Consumerism study, conducted in partnership with Porter Research, 90 percent of respondents very likely will return to the health system based on the availability of the ClearBalance zero-interest financing program. What’s more, 88 percent say they will recommend the health system to family and friends. This trend is prompting ClearBalance health system partners to proactively communicate payment options before, during and after care.
“The patient’s financial experience spans multiple steps in what we call the “Pre-service to Next Service Patient Financial Journey™,” says Haupt. “The approach eases patients’ concerns about how they’ll pay their out-of-pocket costs because the health system provides an affordable payment option at several points of patient engagement.”
Creating a financial path before care enables patients to focus on their care and recovery vs. worrying about how they’ll pay their medical costs, Haupt adds: “This strategy removes cost as a barrier and positions the health system as the logical, affordable choice the next time the patient needs care.”
Protecting market share is critical, and most health system leaders understand they must appeal to consumers’ wants and needs, which includes affordability, to gain their loyalty. The Healthcare Consumerism study shows that consumers expect to discuss the cost of healthcare; 75 percent of survey respondents ask about payment options. Moreover, 87 percent expect their healthcare provider to offer long-term financing and 89 percent say they need more than 12 months to repay their healthcare expense. In return, health systems that offer ClearBalance patient financing routinely see loyalty and referral ratings of 90 percent and 88 percent, respectively.
Patient loyalty and referral are important indicators that significantly affect financial performance. A patient who returns to a health system within 18 months generates six times worth the revenue of the initial visit, according to The Advisory Board Company. Offering ClearBalance patient financing to the increasing number of consumers who will need an affordable payment option clearly is a must-have in the health system revenue cycle.
ClearBalance has been at the forefront of patient pay management since 1992, providing high-performing patient financing solutions and revenue cycle IT expertise while enhancing the consumer experience. The ClearBalance program features the only HFMA Peer Reviewed ROI Value Model™, which identifies providers’ cost to collect patient pay and sets nationally recognized benchmarks for a long-term financing alternative. ClearBalance.org
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