Issue link: https://beckershealthcare.uberflip.com/i/731691
53 Executive Briefing Fortune-Telling in Revenue Cycle Management: Patient Personas and Propensities to Pay A trend that is having a very significant impact on health- care payments today is undoubtedly the shift of finan- cial accountability to healthcare's new patient consum- ers, with self-pay now being recognized as the third largest payer behind Medicare and Medicaid. As a result, there is an increase in bad debt and patient liability on the provider side, forcing providers to change the way they do business. Today, hospitals and health systems are akin to retail organi- zations. With the goal of providing consumers with multiple payment options — either at the point of service or afterwards — healthcare organizations have begun using website por- tals, mobile capabilities, payment plans and sophisticated interactive voice technologies, to name a few. The industry is abuzz over predictive analytics that give providers the opti- mal ability to collect payment from the new patient-consum- er population. This approach involves the ability to accurately forecast propensity of patients covered by high-deductible health plans to pay — all based on geographic, demograph- ic and historical payment data. This strategy deviates from seeking out a traditional credit score. T. Scott Law, founder and CEO of Zotec Partners, cites a Con- nance study regarding the use of credit scores in determin- ing a patient's payment history, noting, "Up to 25 percent of patient pay revenue can come from households that have no or thin credit bureau files, which would make these accounts fall outside the capabilities of a credit-based scoring mod- el, essentially because they are 'unscorable.'" He goes on to say that credit scores, while addressing consumer debt and purchasing behaviors, cannot be compared to medical debt. In this same vein, healthcare is currently undergoing the Google effect, or the idea that people are no longer ever at a loss for answers because of powerful search engines, according to Mr. Law. He says, "Data essentially eliminates gut reactions and personal bias from business decisions because it provides answers in black and white." Additionally, he remarks that many providers are not up to speed when it comes to putting a focus on how the patient experience fits into their revenue cycle, adding, "The management of clinical applications such as EHRs, plus administrative functions related to scheduling and admissions, all tie into the patient experience side of the equation, which has a direct and very relevant impact on physician revenue." On the flip side of the coin, healthcare providers are certainly aware of the complexities they face, including what and when to bill patients throughout the revenue cycle, and especially calculating a patient's likelihood to pay. Mr. Law says that by using data to calculate a patient's propensity to pay, healthcare providers can determine which collections strategy will yield the maximum return in revenue. "There are millions of data elements generated in a year, including social data, demographic information, social patterns, clinical data and buying patterns, including when patients like to pay their bill," he adds. Healthcare is a New "Relationship" Business As the healthcare industry becomes more focused on meeting the demands of consumer behaviors, understanding patients' tendencies toward payment is increasingly central to revenue cycle management and collections. This is especially true in an era when high-deductible health plans are more popular and patients carry more responsibility for their coverage, according to Mr. Law. "This used to be a physician- to-carrier relationship, but it has now transformed into a physician-to-patient or physician-to-consumer relationship," he notes. Mr. Law goes on to say that consumers have begun Sponsored by: "Providers should invest their resources in accounts where extra efforts will yield net cash returns, specifically on patients who have a propensity to complain." — T. Scott Law, Founder and CEO of Zotec Partners