Experts tout price transparency as the solution to patient financial experience woes, but health literacy must play a key role.
By Sara Heath
– The healthcare industry is falling short of creating positive patient financial experiences, and until medical billing offices can address patient financial literacy, efforts to boost price transparency will be of little help, according to a new report from Waystar.
That is not to say that being forthcoming about the cost of care is not important, the report authors noted. In fact, driving price transparency is a high priority for patients.
The report, which outlined survey response from nearly 1,000 adult healthcare consumers, revealed that one-quarter of patients say limited price transparency is their biggest gripe with their hospital experience. Patients want to know how much their healthcare is going to cost and they want to make use of that information.
But the reality is that most patients are not using price data. Despite efforts to increase healthcare price transparency, including a 2019 rule requiring most hospitals to publish their chargemaster lists, only 12 percent of patients had shopped around before a medical procedure.
Limited patient financial literacy may be to blame, the survey showed. Thirty-eight percent of respondents said they didn’t know that the cost of care could vary from hospital to hospital, while 24 percent said understanding chargemaster lists is too complicated. Twenty-three percent of respondents said they didn’t know how to price shop.
Healthcare organizations aren’t exactly addressing the issue of financial literacy, either, the report suggested. Only 28 percent of patients said a hospital representative had discussed their total out-of-pocket costs before a procedure, meaning most patients went into their procedures blind to the costs.
What’s more, patients don’t feel particularly empowered to discuss their bill with a hospital representative after they have received care. Twenty-one percent of respondents said they talked to a hospital rep or considered doing so, compared to 79 percent who did not seek help with a bill.
Only 35 percent of patients took the initiative to compare their hospital bill with their health plan’s explanation of benefits to ensure they were getting correct coverage.
As a result, patients are left with medical bills that can be insurmountable for some. Thirty-five percent of all respondents said they owe at least $100 in out-of-pocket medical expenses for their last procedure. Eight percent owe between $500 and $999 and 7 percent owe between $1,000 and $5,000.
And what comes next is medical debt, the Waystar report revealed. Only 60 percent of patients have paid their medical bills in full, and 10 percent said they don’t expect to ever be able to pay their medical bill in full.
Challenges with patient financial responsibility are impacting some populations more than others, the survey continued. Younger patients ages 18 to 39 tend to be hit harder with high medical bills than their older patient counterparts.
For example, younger patients are more likely to have to prioritize paying their healthcare bills over other living costs such as rent, mortgages, and groceries.
In total, 65 percent of all respondents said they did not have to prioritize their medical bills over any living expenses. However, 82 percent of those respondents are over age 65, and the researchers noted are more likely to have Medicare coverage.
Conversely, twenty-six percent of all respondents have had to go without care because of cost. Of those who have forgone care, 38 percent were ages 18 to 39 and 24 percent were ages 40 to 64. Only 14 percent were over 65.
Younger patients also reported more challenges with surprise medical billing, with 32 percent saying they were charged more than they expected for their last medical procedure. This younger cohort was three-times more likely to say they experienced a surprise medical bill compared to patients over the age of 65.
Healthcare organizations are acutely aware that patient billing practices need a significant overhaul if they are going to ease patient financial responsibility. Doing so not only benefits the patient but will also help the hospital or clinic stay afloat by increasing their patient collections.
But to do this, providers must pinpoint what patients want to see in the billing process.
Overwhelmingly, patients are asking for simplicity, the survey revealed. Forty-five percent of patients said they want a clear bill that outlines the final balance that they owe. Forty-two percent want access to payment plan options and 41 percent want access to an online bill payment portal.
But again, there were some differences in preference for different age cohorts. Thirty-seven percent of patients favored an online bill payment option, while 29 percent wanted to pay their bills in the office. Twenty-eight percent preferred a mail-in option.
But when stratifying those numbers by age, it’s clear younger patients prefer digital options. Forty-seven percent of the 18 to 39 crowd favor online bill pay, compared to only 25 percent of those over age 65. Conversely, only 17 percent of younger patients prefer paying their bills in the office or via mail.
It will be essential for healthcare organizations to create customizable payment options for their patients, especially as technology still divides different generations of patients. Offering digital payment options as well as more tradition payment plans will help organizations drive convenience for patients and ensure they meet all patient needs.
And in doing so, organizations can promote a better patient financial experience that is functional for all patients and the healthcare organization itself.