Redefining Patient Responsibility for a New Era
Excerpted from HFM Magazine
Feb. 16, 2016 — As patients assume responsibility for a growing proportion of their healthcare costs, providers face a financial burden from having to write off costs for patients who cannot afford to pay their share. Providers can benefit from developing programs to alleviate this burden.
In 2013, more than 60 percent of the financial burden at Ochsner Health System, the largest health system in the Gulf South, came from residual balances, with more than 70 percent of the residual bad debt coming from commercial accounts. The same year, the Ochsner patient portion of total expected liability for insured accounts was 8.4 percent. The average collection rate for such patient balances is only 46 percent, which increases pressure on the overall margin for insured revenues as more of the burden shifts to the patient.
With rising patient responsibility, Ochsner’s leaders realized that previous approaches wouldn’t be sufficient. Instead, Ochsner’s leaders recognized that they needed a systemwide approach to enhance pre-service financial clearance processes, increase the culture of responsibility, improve patient engagement, satisfaction and loyalty, and support the organization’s financial viability.
As part of the initiative, Ochsner designed a new approach to patient-responsibility revenue focused on tailoring liability requirements and patient interactions to align with patient financial risk evaluations.
For patient accounts flagged as involving risk, the Ochsner team member is prompted to have a different conversation with the patient regarding his or her options and requirements. Full payment is requested, but minimum deposits are required for expected and outstanding liabilities, with tiered thresholds based on the amount due. Part of that initiative includes consumer-friendly interest-free loans offered by ClearBalance®.
As self-pay became one of the fastest-growing segments of Ochsner’s revenue cycle, revenue cycle leaders shifted focus to make it convenient and easy for patients to meet their obligations.
Positioned for the Future
With a highly positive response from patients, physicians, and staff, Ochsner’s initiative has been on pace to achieve or exceed all of the defined objectives. Specific successes after more than nine months of run time with the new process include:
• A financial clearance success rate over 95 percent
• Less than 1 percent of services deferred or self-cancelled
• A 36 percent increase in pre-service and point-of-service collections over the same period in the previous year, well exceeding the HBI top-quartile benchmark for pre-service and point-of-service collections as a percentage of net revenue
In addition, offering the ClearBalance program correlates to patient loyalty. According to a recent survey of Ochsner’s patients who have used the ClearBalance consumer-friendly loan program, 91 percent say they will return to Ochsner Health for service in the future and 87 percent will recommend Ochsner to friends and family due to the availability of the program.
If hospitals can inform patients of what their expected out-of-pocket expense will be — prior to service — and prepare for them a series of payment alternatives, including determining Medicaid eligibility, the likelihood of the patient paying that bill significantly increases.
Patients who are better educated about their financial responsibilities and enabled to make informed decisions about their care often result yield situations with stronger collections and a strong avoidance of the need to defer or cancel a patient’s service.
Ochsner Health System now is better positioned to address the rise in patient financial responsibility, remain financially strong, and continue its mission of delivering premier health services for the communities it serves.
Article written by Erin Bartley, Stephanie Wells, Wendell White and Katherine Cardwell