The growing emphasis on the patient experience is an undeniable trend in today’s healthcare environment. Healthcare has entered an era of consumerism as patients become increasingly empowered to make healthcare decisions and, in-turn, healthcare organizations increasingly employ customer-centric policies and initiatives.
Patient financial experience is directly linked to profitability.
In today’s healthcare realm, organizations are finding that profitability and patient experience go hand in hand. According to a study by Deloitte, hospitals with high patient-reported experience scores have consistently larger net margins relative to hospitals with low satisfaction scores, even after controlling for hospital organizational characteristics (such as hospital size, urban/rural location, ownership type, teaching status, and being part of a system), case and payer mix, and local market HRR characteristics.
A positive patient experience increases patient trust, loyalty, and likelihood of endorsement, which in-turn has been linked to higher volume and retention, decreased malpractice lawsuits, decreased staff turnover, and increases in funding reimbursement.
The HCAHPS survey, a national standardized survey with performance results tied to hospital reimbursements, captures key areas of the patient experience but does not capture a patients’ financial experience. In fact, there is no established, standardized survey for capturing patient satisfaction as it relates to the revenue cycle.
The revenue cycle often contains both the first impression (scheduling or registration) and last encounter (billing or collections), and may heavily influences a patient’s likelihood to return to that provider in the future. But to what extent a patient’s financial experience affects their overall satisfaction and likelihood to return is still unclear, highlighting a need for future research.
The first step in understanding the affect is to determine what to measure, how to measure it, and how to set a baseline.
Measuring the patient financial experience is often uncharted territory.
With a lack of established measurement tools, healthcare organizations are left to define and calculate the patient financial experience on their own.
HBI’s 2016 Academy Survey found that while the majority of organizations are attempting to monitor the patient financial experience, the metrics used vary from hospital to hospital. Most organizations do not have metrics developed specifically for capturing the patient financial experience. Instead, they often repurpose existing measures to help shed insights on the matter.
Common metrics include:
- Upfront collection rates or point-of-service collection success;
- Number of days that revenue in credit balances;
- Call abandonment rates; and
- Registration wait times.
One promising, newly developed measure for capturing the patient financial experience is the accuracy rate of out-of-pocket cost estimates.
A source of frustration for patients, especially as healthcare costs continue to rise, is complex bills and a lack of price transparency. If hospitals can play an active role in preparing patients for out-of-pocket expenses, patients are more likely to understand their bill. And a satisfied patient, whose expectations have been managed, is more likely to pay than a dissatisfied patient. One study by Connance found that, of the patients who reported being fully satisfied with billing, 74% paid their bills in full, compared to the 33% of unsatisfied patients who paid their bill in full.
Not only is there variation in what is measured, there is variation in how a metric is measured.
Hospitals use different methods for capturing price estimate accuracy. Some hospitals leverage an EHR bolt-on that that draws on available data, such as payer contracts and historical charges, to create estimates. The accuracy of the estimate equations are verified by comparing the estimates with the final EOB. A benchmark for what is considered “accurate,” however, is still in the works. Some organizations define an estimate accurate if it is within 10% of the patient’s final charges, while others define accurate estimates within a baseline of 25%.
Some hospitals measure out-of-pocket price estimates by surveying patients. In this method, patients define what is considered an accurate statement. Organizations can then set goals, such as 85% of respondents reporting that their bill was correct. Post-billing patient surveys can also capture patients’ experience in understanding their bill, another component of patient financial satisfaction. Surveying can also measure patient satisfaction with Revenue Cycle staff interactions, and identify training opportunities, such as the need for scripting and customer service training.
The patient financial experience is multifaceted; there’s no one metric for capturing and understanding the patient financial experience.
It is recommended that organizations use not only internal metrics (like POS collection rates and call abandonment rates) but also capture the patients’ voice directly (through surveying, interviews, and focus groups) to fully represent the multidimensionality of the patient financial experience.
The healthcare field has a long ways to go in terms of identifying necessary metrics, establishing calculation methods, and setting appropriate benchmarks. Despite this gap, or perhaps because of it, it is crucial for healthcare organizations to break ground in measuring dimensions of the patient experience. By monitoring and trending the patient financial experience, healthcare organizations are likely to gain or maintain a competitive advantage.