rethinking propensity to pay scoring and digital payments · 2020-03-10 · size doesn’t ﬁt...

Rethinking Propensity to PayScoring and Digital Payments:

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© 2020 VisitPay. All rights reserved.

A Winning Patient Financial Engagement Strategy

© 2020 VisitPay. All rights reserved.

VISITPAY.COM

5 things to expect fromyour patient as payerscoring partner:

A portrayal specific to the community you serve

Behavioral insights that complement financial insights

Segmentations that let you create successful strategies

Ease of use: online and o�ine

Continuous improvement, across the full revenue cycle

Rethinking Propensity to Pay Scoring and Digital Payments 1

What’s inside?

It’s time to reboot the financial scoring technologies used by many health systemsOver the last five years, health systems have been confronted with a dramatic change in their financial circumstances.

Revenue mix has shifted inexorably from commercial and government payers to patients as payers¹. This movement is caused both by increases in the number of uninsured people² in some states and a universal rise in adoption of High Deductible Health Plans (HDHPs)³. Research shows that many Americans struggle to pay any unexpected out of pocket expense of more than $400⁴. With personal savings rates remaining low and unplanned healthcare expenses getting larger, the individual financial stress experienced by patients is now being reflected at healthcare providers in the form of both margin compression and low⁵ levels of patient satisfaction with the financial experience.

One of the challenges implicit in this changing payer mix is that people behave and pay very di�erently from commercial or government organizations. The third group of payers is not one corporate body, but is made up of millions of individual Americans with their own unique needs, preferences, and situations. The patient as payer group is amorphous and diverse, making it hard for the revenue cycle team to maximize the revenue opportunity while maintaining patient satisfaction. Revenue cycle teams may have their own call center (or may partner with a third party) but no call center operation can scale e�ectively to meet the needs of each individual patient, even assuming that all patients want to find a solution to their financial situation over the phone.

Revenue cycle teams are not short of technologies that can help. For years health providers have purchased propensity to pay scores. Many have used them to make underwriting and credit policy decisions, and to prioritize outbound calling. In some cases technology vendors have augmented their scoring products with other o�erings that allow health systems to accept self-service digital payments and consumers to set up payment plans. This is a convenient package for the revenue cycle leader. But the size, importance, and complexity of the patient as a payer class exposes significant gaps and weaknesses in these historical solutions to patient financial segmentation and revenue collection.

In fact, the revenue cycle teams still tied to these legacy technologies are quickly being left behind. Designed for a time when consumer payments were a small portion of the health system’s revenue, they don’t provide the cutting edge performance and ease of use demanded by a modern healthcare finance team who sees 30% or more of their revenue attributable to patients. The health systems caught in this situation display common characteristics: call centers overburdened by growing inbound volumes and patient payment rates that, if they are growing at all, are doing so significantly more slowly than increases in patient financial responsibility. The result? Higher levels of bad debt, frustrated sta�, and declining patient satisfaction.

© 2020 VisitPay. All rights reserved. Rethinking Propensity to Pay Scoring and Digital Payments 2

VisitPay is a company focused on

helping health systems manage the

patient revenue cycle through technology

and advisory services that help each

provider maximize payment rates and

consumer satisfaction. We have created

the tools and skills across the five key steps below to enable the health system

to personalize the financial relationship

with the patient so both parties thrive.

Tailor financial scores just for them

Be experts on the needs and

preferences of patients when it comes

to the financial experience

Easily stand up strategies based on segmentations in a digital self-serve

environment

Apply those same strategiesthrough the call center in an

assisted service model

Run tests and have a continuous learning approach that helps find the

best balance between patient

satisfaction and payment rate

Traditional Means of PredictingCredit Worthiness Do Not Work Here

U.S. consumers treat medical debt di�erently from any other class of financial obligation. Research into bad debt trends across consumer spending categories shows that healthcare bills may remain unpaid regardless of the presence of traditional markers of credit worthiness. In other words, a patient may have an 800 FICO score, but might still let a recent statement from the hospital gather dust in the corner.

Why this behavior occurs is complex to unpack. Partly it is because the multi-party payment model introduces uncertainty for consumers in how much they actually owe. Partly it is because healthcare is still heavily dependent on using paper and transactionally-driven EMR technologies to communicate complex encounters, leading to the twin pitfalls of both over-communicating and under-explaining to patients. Partly it is lack of price transparency. Partly it is that collection e�orts are misplaced because the analytical models used to predict financial risk are not fit for purpose.


Patients aren't paying:Patient revenue 180 days after a new balance

Bad Debt

Open A/RPaid

Charity

22%

26%35%

17%

A very large integrated healthcare provider of about $5B in Net Patient Revenue will likely originate more than $1B in consumer obligation this calendar year. That is more than many local or regional banks operating in those same communities. Yet of course healthcare organizations aren’t optimized to be consumer lenders. They are healthcare providers. The numbers bear this out.






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Given the large numbers of unpaid healthcare bills that move to bad debt, and associated high levels of personal bankruptcy, it is clear that many generally accepted technologies used in healthcare today for predicting consumer payment rates and collecting on consumer balances are inadequate.

Source: VisitPay analysis

With contemporary technologies and the latest analytical techniques, there are five steps modern healthcare providers can take to equip themselves with the tools to thrive, no matter how many dollars are due from the patient.

1: One Size Doesn’t Fit All:Localizing Propensity to Pay

It is a maxim in any consumer-facing industry that one size doesn’t fit all. And the same goes for the scoring products that healthcare organizations use.

Every local population in a city or rural area that is served by a U.S. healthcare organization is di�erent. Historically, healthcare scoring models have been built on national credit data. To create a more accurate model of propensity to pay (PTP), the approach needs to take into account the specific situation being faced by the provider.

This starts with the health system itself. Often years’ worth of financial data is locked up in EMR systems making it hard to access and use. Specialist companies are expert at helping the health system put this data to work and using it as a foundation for assessing financial risk across a patient population. Provider-specific data is essential to understand why and when people with great credit scores and the means to pay are choosing not to pay their healthcare bills.


Five important steps

VisitPay Incumbent

0%

50%

100%

New model better predictedrepayment risk across patient bands

10 2 3 4 5 6 7 8 9

A localized, accurate PTP model equips the revenue cycle team with the intelligence to focus collection e�orts—having a dramatic e�ect on call center e�ciency—and gives them an actionable baseline for making good credit decisions that will result in high levels of payment.

Based on VisitPay’s heritage and experience in optimizing the performance of billions of dollars of non-healthcare lending, we add proprietary data to gain insight on the full spectrum of consumers that utilize healthcare services.

Armed with that data, we build custom models specific to each provider and the consumers they serve to create clarity on both propensity to pay as well as ability to pay. The result is a far cry from the generic models purchased by many health systems today, as this comparison of VisitPay’s custom PTP model with a legacy incumbent illustrates:






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2: Going Beyond Creditand Demographic Scores

Given the diversity in expectations, needs, and behaviors discussed above, it is no longer su�cient just to rely on financial and demographic scores when working with the patient as a payer group. Such scores reveal nothing about how the consumer may, or may not, want to receive information about the healthcare financial process in the first place. For example, many hospitals present financial information and policies in a brochure at the registration desk. But this form of content is only likely to appeal to a subset of consumers. Modern healthcare providers are taking a leaf from the marketing playbook of retailers, airlines and other consumer-facing industries and augmenting financial scores with an understanding of the needs and preferences of each consumer, building a complete perspective in order to make the financial experience relevant to each person.


By understanding these behavioral characteristics of patients, the finance team can gain insights into how and when to communicate with certain patient populations. For example, one group of patients may have a preference for communication by paper, another by text message, another by email. Some patients may be active on social media and respond to content there that engages them with the financial experience. Some consumers may deal with medical expenses while they’re at work, others in the evening when the kids are in bed. Some may have an inclination to understand every detail about their bill, others may just want to get it paid as quickly as possible.

VisitPay has conducted ground-breaking research into the needs and preferences of di�erent patients when it comes to the financial experience, summarized in our annual VisitPay Report. It shines a light on how providers can work with patients in ways that make sense to patients, their needs and situation.

The VisitPay ReportSample pages from






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3. Create a Di�erent Experience

Equipped with an understanding of the financial situations and behavioral preferences of their patients, providers must next create and drive a di�erent financial experience for each patient through deliberate and automated strategies. Scores and behavioral segmentations are irrelevant if they can’t be used to make consumer-facing strategies come alive easily and at scale.

Segmentations are the key to turning insights into actionable strategies and generating outsize value for the provider. Through segmentations, the provider can tailor the financial experience in ways that are both meaningful for the patient and scalable for the provider.

Many patients expect a digital, tailored billing experience that allows them to self-serve and manage expenses at a time that is convenient for them. VisitPay research shows that people of all ages look to manage medical expenses online, through their health system’s website.


When dealing with larger obligations and setting up financing plans, many patients also prefer to find a solution on their own, without asking for help or having what may be an awkward conversation with a call center agent over the phone. VisitPay segmentations are easy to use as the basis for tailored o�ers in a patient-facing digital payment portal. By customizing payment o�ers on a segment, or micro-segment basis, providers are much more likely to o�er financial terms that are relevant and appealing, thereby improving payment rates and patient satisfaction.

By applying behavioral insights, providers can tailor the language, interface and level of detail along with the channel that engages the patient in the financial process in the first place.

The application of these insights in a self-service patient-facing financial portal ultimately creates tremendous lifts in short- and long-term payment rates, turns brand detractors into promoters, and introduces significant e�ciency into the revenue cycle through automation and decreased inbound call volumes.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

42

%

31%

30

%

46

%

30

%

23

% 21%

31%

38

%

17%

12%

13%

18% 17%

6%

2%

3%

6%

From The VisitPay Report:

How do you prefer to pay for medical bills?

Onlinethroughmy bankaccount

Onlinethrougha healthsystem

By mail By phone At myphysician

appointment(s)

Other

18-40 Years Old

41-65 Years Old

65 Years Old+






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4. Serve All Patients

While creating a great digital experience for patientswho want to opt-in is important, it does not allow the provider to meet the needs of everyone. As healthcare digitizes at an exciting rate, a minority, but still significant portion of consumers, cling to a paper experience. Providersneed a delivery model that addresses both digital and analog groups with the same level of personalizationand automation.

The challenge for providers is how to bring the same level of intelligence to paper-based processes while consumers migrate to digital at a pace that works for them.

The answer lies in equipping sta� with the tools used directly by patients, but in an assisted service model. When call center agents have access to the same intelligently derived financing options as self-serve patients, the benefits of the approach extend more widely across the patient population. These interactions also present many opportunities to fully convert patients to a self-serve model, should they choose to do so. But in the meantime provider sta� can o�er intelligent financing options that meet the needs of the patient population they are serving.


5. Make the Patient Revenue Cyclean Actual Cycle

Ultimately health systems working with the patient as payer are trying to find the right balance between patient satisfaction and payment yield. A one-size-fits-all model that covers all health systems does not exist.

Not only is it vital to be able to easily activate segmentation-driven collection approaches digitally and in the call center, it is just as important to measure results, test di�erent strategies over time, and optimize the whole system.

Revenue cycle leaders are applying machine learning-based artificial intelligence and an A/B testing platform to create continuous learning loops that allow them to understand performance in patient satisfaction and payment rates over the short- and long-term. The outputs from these learning loops are improved scores, perfected and ever more granular segmentations, and optimized strategies in the form of financial o�ers and approaches to patient engagement.

This learning process must be accompanied by constant measurement of Net Promoter Score, Customer E�ort Score, and anecdotal patient feedback—along with constant assessment of both short- and long-term payment rates.

At VisitPay we partner with our clients to run tests that continually o�er di�erent strategies while closely monitoring outcomes.

↑30-50%Payment

yield

↑70%Patient

satisfaction

↑75%E�ciency

improvement

TYPICALVISITPAYRESULTS:






environment






The technologies that revenue cycle leaders have depended on for scoring and segmentation were designed for a time when the patient population owed a small fraction of the total revenue owed to a health system. That dynamic has changed profoundly. Revenue cycle leaders should now expect their data and analytics partner to:


Providers without these capabilities are being left behind. Forward-leaning health systems—those determined to take advantage of the patient as payer era in terms of both improved collection rates and improved consumer loyalty—need to make big changes that result in important outcomes. It is time to ask: is your health system ready to meet the new demands of the millions of individuals that constitute the patient as payer?






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Conclusion

¹https://revcycleintelligence.com/news/hospital-revenue-from-patient-financial-responsibility-up-88

²https://www.census.gov/library/publications/2019/demo/p60-267.html

³https://www.ajmc.com/newsroom/enrollment-in-highdeductible-health-plans-continues-to-grow

⁴https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html

⁵https://www.washingtonpost.com/blogs/post-partisan/wp/2018/05/22/why-has-the-personal-savings-rate-declined-so-dramatically/

Sources:

https://revcycleintelligence.com/news/hospital-revenue-from-patient-financial-responsibility-up-88

https://www.census.gov/library/publications/2019/demo/p60-267.html

https://www.ajmc.com/newsroom/enrollment-in-highdeductible-health-plans-continues-to-grow

http://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html

http://www.washingtonpost.com/blogs/post-partisan/wp/2018/05/22/why-has-the-personal-savings-rate-declined-so-dramatically/

VisitPay is a dedicated group of consumer finance people

working for the good of the healthcare industry.

Our company was established after our founders discovered an

entire industry that was using outdated and inadequate systems

to manage patient revenue—leading to frustrated providers,

dissatisfied and confused patients, and, ultimately, fewer

payments. Something had to change.

So we decided to fix it. In doing so, we didn’t only make patient

billing easier, we rethought patient financial relationships from

end to end.

Let’s explore how your health system can rethink things, too.

Whether you have a question or you’d like to schedule a demo to

see VisitPay in action, we look forward to showing you how this

powerful platform makes patient financial engagement easier

than ever.

About VisitPay

VISITPAY.COM

VISITPAY.COM


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rethinking propensity to pay scoring and digital payments · 2020-03-10 · size doesn’t ﬁt...

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