Motivating Your Lazy Payers

Transcription

1 Whitepaper This whitepaper addresses how you can drive payments from patients who have the means to make payment but are slow to take action.

2 Lazy Payers Aren t So Lazy For many patients who carry an outstanding balance, it s not that they don t have the funds to resolve that balance. It s just that it isn t a priority. These patients are sometimes referred to as lazy payers. But maybe lazy isn t a fair description. After all, one of the reasons these past due patients fail to make timely payment is that they re not lazy at all. Increasingly demanding work schedules, hectic home lives and other demands on our time can leave a mailed statement sitting on the kitchen counter in a stack of unsorted mail Figure 1 Time use on an average work day for employed persons ages 25 to 54 with children Sleeping Working and related activities Leisure and sports Household activities Eating and drinking Caring for others Other Total = 24 Source: Bureau of Labor Statistics 2 Recent data from the Bureau of Labor Statistics American Time Use Survey shows that for the average employed American with children, about an hour each workday is devoted to household activities - the category that would include handling the household s bills 1 (Figure 1). And it doesn t necessarily happen every day. The survey also found that only 14% of men and 19% of women engage in household management on an average day (Figure 2). These two statistics suggest that much of our household management happens Figure 2 48% Housework Percent of population who did household activities on an average day 39% 65% Food preparation and clean-up Men 12% 8% 14% 19% Lawn and garden care Barriers to Effective Outreach to Lazy Payers The high cost of additional mailed statements Women Household management Source: Bureau of Labor Statistics on the weekends. As a result, we are left with stacks of unsorted mail and numerous tasks to handle once we devote time to household to-do lists on Saturdays and Sundays. The challenge for healthcare organizations is breaking through the day-to-day demands of patients to collect payment earlier in the A/R cycle. Historically speaking, redirecting patients attention to their unpaid bill has been easier said than done. Let s review the most common barriers healthcare organizations experience when struggling with a high volume of lazy payers. It s certainly possible that those individuals with a high propensity to pay would take action after receipt of another statement, and many organizations hope for that scenario when planning another mailed outreach. In theory, additional mailings should increase the chances of breaking through the clutter. But does the small uptick in dollars collected justify the extra investment in those additional mailings? Average per piece costs for mailed statements typically range anywhere from $8 to $12 - a figure that includes all aspects of the communication from initial statement generation and postage costs to processing of any payments that result from the efforts. Because of these high costs, many organizations that rely on mailed statements exclusively find themselves under-communicating with their outstanding accounts. The dollars collected from extra mailings don t always justify the additional cost. TeleVox Software. All rights reserved. To learn more visit us at televox.com

3 Staff limitations for manual phone outreach While high cost is a challenge for mailed efforts, the expense is often even higher for organizations that target accounts with manual calls from the staff. A survey of American Academy of Dermatology (AAD) members found that 7 of practices have staff members make calls to patients with outstanding balances, costing those practices thousands of dollars in staff labor expense annually. 3 Like those who employ a statementheavy strategy, organizations that center Call outcomes by hour 6 outreach strategies on manual calls from staff also find themselves undercommunicating with past due accounts. Poor connection rates and the amount of time required to manually attempt each account make it difficult for outbound agents to efficiently work an A/R list. Optimistic estimates suggest that a 1 manual caller can make 20 attempts per hour, and a TeleVox analysis of call 8 a.m p.m outcomes finds that callers tasked with calling accounts during typical business are not leveraging the optimal Busy Live Answer Hour Machine/Voic No Answer time of day to reach these accounts. A TeleVox analysis of 1.1 million calls Figure 3 Source: TeleVox found that calls placed after 5:00 p.m. are more likely to be answered by a live party than calls delivered before 5:00 p.m (Figure 3). The inability of many organizations to have manual callers attempt to connect with patients after business is a major barrier to drawing payment from lazy payers. % of Calls in Hour Hesitation to proactively take action The same AAD member survey also found that 45% of practices wait until accounts are at least 90 days past due before making outbound efforts to resolve those balances (Figure 4). The wait doesn t apply to all organizations, as 19% of those surveyed target accounts before the 60 day mark. But for those who do wait, a common assumption is that those with a high propensity to pay will eventually get around to it. The risk from the organizations standpoint is the psychological implication of an overly large gap between the date a service was rendered and the date they are finally reconnecting with that patient for payment. Other industries do not allow for such a gap between service and payment, and this can lead to an idea that the payment is not as important as others the patient owes at any given time. 45% Figure 4 When are practices reaching out to past due accounts? 7% 4% 15% 29% 0-30 days days days 90 days No outreach Source: AAD Member Survey Confusion from patients about what they owe A 2009 survey by McKinsey & Company polled Americans on why they didn t pay their healthcare bills 2. 17% indicated that they forgot to pay (sounds like a lazy payer ) or were confused about what they owed. In these instances of confusion about what is owed, many patients will put the bill aside and wait for an additional statement from their provider s office in hopes that the balance will be corrected the second time. Lack of clear communication or explanation in these scenarios can prevent action from patients who would otherwise be able and motivated to pay.

4 Correlating A/R with Automated Outreach As healthcare organizations continue to be challenged by any or all of these common barriers, there is an increased focus on best practices in revenue cycle management and how industry leaders are effectively overcoming these challenges. 4 MGMA s report on Performances and Practices of Successful Medical Groups uncovers some interesting similarities between the practices it designates as better performers 3. Better performers are defined in part as practices that collect their receivables quicker than their peers. A comparison of the percentage of total A/R aged over 120 days shows that better performers only have 8.98% accounts in this bucket vs % for all other practices surveyed (Figure 5). 15% Percentage of A/R aged over 120 days 16.66% While the MGMA report does not cite reasons for this difference between better performers and everyone else, there is also an interesting contrast in how these practices use automated outreach in the practice. 55% of better performers use an automated telephone call reminder system in the practice, compared to 37% of other practices surveyed. The MGMA report does not list the various types of notifications that practices handle through their automated system, but given the growing popularity of automated notifications as part of an organization s A/R strategy, it can be assumed that many better performers use their system to reach out to their past due accounts. 1 5% Figure % Better performers All other practices Source: MGMA How Automating Outreach Will Motivate Them Should you consider automating notifications to inspire your lazy payers to take action? Given the barriers to success many organizations face today and the high correlation between automated systems and A/R success among better performing practices, the idea is worth investigating. Automated outreach is the most cost-effective way to drive response from patients. Here are some ways automated patient balance notifications can lead to higher volume of payments from those who simply need a nudge. Make it easy for patients to remit payment. How often do you personally write a check, stamp an envelope and mail it to a service provider? A December 2012 Western Union study found that less than one third of payments occur via non-electronic channels, and 39% of U.S. consumers surveyed said they would pay more bills online in Many healthcare organizations have established online portals to offer convenient patient payments, but there is still an opportunity to further ease the transition between the past due balance notification and the patient s action. While mailed statements require patients to stuff and send the envelope or type a URL into their Internet browser when in front of their computer, other outreach methods allow for more immediate action. During an automated phone call, a patient can simple press a number on the keypad to make payment via an IVR system. This same method can be used to transfer and speak with the staff if there are questions or special payment arrangements need to be made. Make it a numbers game. Despite your best efforts to approach patients early after service and offer the utmost convenience in how they can make payment, some patients will still hesitate to pay. And that s OK. Automating your outreach process will allow you to communicate more frequently with these accounts and increase the odds that they will be inspired to make payment. Because leading vendors can deliver messages to entire A/R lists

5 at one time, there are none of the time constraints associated with a manual outreach process. In fact, many organizations choose to have the notifications delivered in batches or waves to ensure they are amply staffed for inbound transfers from patients who are making payment. Others avoid this staffing need by collecting payment through an IVR system and having staff available only to answer questions. 5 Connect with the patient more quickly after the service. Many organizations hold back from contacting patients early in the cycle due to a lack of resources to communicate with this high volume of accounts. Because automation makes notification volume a virtual non-issue, you can minimize the gap between date of service and when you ask that patient for a payment. Statistics from the U.S. Department of Commerce indicate that the likelihood of collecting on accounts held inhouse begins to depreciate dramatically after as few as 30 days past due. By 90 days, accounts depreciate at an accelerated rate of 0.5% per day, and after 180 days, the account has depreciated to less than 3 (Figure 6). 10 Depreciation of accounts held in-house Figure m 7m 9m 10m 11m 12m Source: US Department of Commerce Study of Depreciation of Accounts Held In-House With such high percentages of outstanding balances sitting with patients who can pay but haven t prioritized that payment, how will organizations adjust outreach strategies to drive these accounts to action? Automated notifications overcome the resource constraints of live agents and additional mailed statements while narrowing the gap between point of service and the balance notification. Organizations seeking to motivate their lazy payers should consider automated outreach as an early-cycle communication tool. 1 American Time Use Survey, United States Department of Labor, Bureau of Labor Statistics, October Do High Deductibles Mean High Risk For Physicians?, Medical Economics, December 10, MGMA Performance and Practices of Successful Medical Groups, Medical Group Management Association, Western Union Payments Money Mindset Index, Javelin Strategy and Research, December 2012.