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Third-party patient financing has a vital role to play in providing patients with more options, and in ensuring that cash-strapped hospitals recoup revenue.
After two years of the COVID-19 pandemic, it is clear that a confluence of factors from staffing issues to financial struggles have impacted the way our healthcare system functions at its very core.
In January, almost 24 percent of U.S. hospitals reporting staffing levels were anticipating labor shortages, according to recent U.S. Department of Health & Human Services data. Rapidly fluctuating patient volume and limited resources have seemingly created a perfect storm.
Healthcare leaders have risen to the challenge and are weathering the storm of the pandemic as best they can. A recent Kaufman Hall report indicates that many providers ended 2021 in a stronger financial position relative to the first year of COVID-19 in 2020.
While the impact of the pandemic on front-line doctors and nurses is well-known, the impact on non-clinical administrative staff is less publicized – and yet, their work is just as critical to hospitals’ survival.
Unpredictable surges in patient need also result in equally surging paperwork and billing needs. Outdated payment processes are a hurdle, and with hospitals’ revenue in flux, it is crucial that these employees help to ensure important payments are collected as quickly as possible. Lessening the strain on administrative employees can help improve job satisfaction, while also driving efficiencies that impact hospitals’ financial health. These changes help everyone at the hospital, including administrators, focus on the organization’s mission to care for patient communities.
At the same time, the way patients get the care they need – and pay for that care – has changed dramatically and was changing long before COVID-19 emerged.
Today’s patients have become consumers of healthcare and are more likely to shop around for a provider that meets their needs, a significant shift in behavior and sentiment. New innovations in healthcare technology are addressing the patient experience, including shifting preferences in how, when and where patients consume care. These technologies and offerings can offer the options and flexibility that patients are seeking.
Importantly, there continues to be a rising demand for ways patients can pay for their care, including contactless, flexible, financing options. In the end, consumers are looking at healthcare as a journey, from the moment they feel they need or want care all the way through billing and payments. This is all due, in part, to the cost-shifting from health insurance companies to the individual over the past 5 to 7 years.
Patients have become the new payer. They are more educated about their options, from HMOs to PPOs and high deductible plans. It is not uncommon for patients to pay for their care directly, which has resulted in healthcare systems tracking and processing multiple payments from both payers and patients, making revenue cycle management more complex. This additional layer of managing in-house financing can further strain administrative staff – especially when payment is not remitted in a timeframe that hospitals need.
According to a report by the Kaiser Family Foundation, approximately 65 percent of U.S. adults report difficulty paying for various aspects of healthcare, especially services not generally covered by Medicare, and nearly half (46 percent) of insured adults report difficulty affording their out-of-pocket costs. This can result in stressful delayed payment processes for everyone.
And it’s no surprise – the Centers for Medicare and Medicaid (CMS) has reported that Americans are paying more in out-of-pocket costs than ever before, surpassing $400 billion dollars annually.
Combined, these factors have ushered in a new era of digital and flexible payment options for patients. For hospitals, this shift can mean more efficient administrative processes. It is fair to say that we are living through a generational shift in how healthcare is accessed and paid for, on all sides of the equation.
Increasingly, patients are asking for more point-of-care options for financing, and they are also demanding more transparency from providers, payers, and financial institutions. Words and phrases like “unprecedented” and “new normal” have become so common in recent years that those speaking them sound like a broken record – but they are right.
Third-party patient financing has a vital role to play in providing patients with more options, and in ensuring that cash-strapped hospitals are recouping much-needed revenue on time so institutions can fulfill their missions of providing the best care possible for those who need it.
Hospitals and health systems in search of a financial partner should consider how that partner will make the path to delivering on their mission easier, reducing the strain on administrative staff, making conversations around sensitive topics like financial health solutions easier, and simply improving the payment process for everyone.
There are many details hospitals and health systems should weigh when choosing a third-party financing partner: the first and perhaps most important is a commitment to and knowledge of the intricacies of healthcare payments, and the second being flexibility in their offering of financial solutions that can address the unique needs of each patient population. The bottom line, though, is that the partner must be immersed in the healthcare space.
Choosing the right financial partner is especially important in this unpredictable day and age, and it can do more than simply keep the billing processes moving forward. It can strengthen relationships with patients, providers and administrative staff by offering solutions that solve many of the issues impacting healthcare financing today.
Alberto Casellas is the CEO and executive vice president of Synchrony Health and Wellness, a part of Synchrony