By Bob Chin, chief information officer, PayMedix
Employers who shift more healthcare insurance payments to employees to keep costs down risk increasingly discontented employees who struggle with growing out-of-pocket (OOP) costs compounded by a flood of overly complicated bills.
The widespread shift of workers into high-deductible health plans (HDHP), in particular, have hit employees hard financially, as nearly one-third of American workers were enrolled in such plans in 2021. It is a trend that is expected to grow.
This shift has also exposed employees to more complex medical bills and statements that rarely add up. What is and is not covered by their plan isn’t clear, nor how much they owe and to whom. In fact, recent studies show that 58% of healthcare consumers were surprised about a bill they received due to confusion about what they owed, and 48% of consumers said they were late on payment for the same reason.
Worse yet, higher OOP costs combined with this billing confusion is causing many employees to postpone or forgo the care they need. A recent survey from Gallup found that 38% of Americans reported that they or a family member had delayed medical care in the prior 12 months because of cost. Additionally, 27% of those surveyed said that they or a family member had put off treatment for a very or somewhat serious condition.
A New Consumer-Focused Payment Approach
But there is reason for hope. New kinds of healthcare payment platforms are entering the market specifically designed to address employee healthcare payment challenges. Many are point solutions, addressing a specific financial issue such as self-pay patient management, easier electronic statements, or access to healthcare payment cards.
Some platforms also apply game theory to create optimal dual-party agreements with multiple providers in the complex billing ecosystem to determine how they all can be compensated by the patient.
At the high end are platforms that provide a more holistic approach in addressing both the financing needs of consumers and the revenue needs of healthcare providers. The most advanced platforms combine advanced technologies with a payment model to create a simpler approach to healthcare billing based on proven analysis of consumer behavior. For example, they utilize AI and statistical modeling to analyze billions of dollars of existing medical payment data and other data to create a payment capacity model that’s balanced and affordable for the employees.
The platforms cover all parts of the healthcare payment equation – providers, patients, employers and TPAs. They shift the financial relationship away from providers by serving as intermediary healthcare payment companies. They pay the cost of the patient invoice to the provider upfront and then assume the payment relationship with the patient. And they can provide credit for out-of-pocket costs at low to no interest and construct a payment schedule over time that fits the patient’s needs.
Some solutions go beyond just extending credit up to patients’ out-of-pocket maximum with reasonable repayment terms. They guarantee payment to providers and give employees enrolled in plans the peace of mind to go and get the care they need. The platforms give employees the information they need to gain control of their medical expenses.
These platforms also help employees deal with billing stress by giving the option to pay over time, regardless their credit histories. All employees can be issued credit for all allowed charges up to their out-of-pocket max, regardless of their credit standing. In other words, the technology guarantees prompt full payment to providers in exchange for giving employees these more manageable repayment plans.
Employees, in turn, gain simplicity, clarity, and transparency in their healthcare bills. The platforms typically utilize technologies to create a simpler, patient-friendly experience over what they owe. Traditionally, most billing information employees receive is disaggregated, repetitive and not very useful for understanding their payment situation. People end up being confused and frustrated when they try to get answers about what they owe to the providers who are trying to collect.
Instead, employees get a single, consolidated Explanation of Benefits (EOB) statement instead of separate and confusing bills for each medical treatment. All employees, regardless their credit histories, can choose to pay over time. This improves access to care by alleviating the burden of up-front, in-full payments and rigid collection processes from providers.
This “super EOB” approach increases employee satisfaction rates by improving access to care. It alleviates the burden of up-front, in-full payments and rigid collection processes from providers. They also shift the financial relationship away from providers and indiscriminate debt collection agencies by taking inefficiencies out of the system and streamline the payments process for all.
When choosing the right healthcare payment platform, make sure it simplifies billing for all, consolidating statements, eliminating paper remits, and removing financial risks for providers. Ensure that they do away with up-front collections from the patients and that payment terms are truly zero-interest as well. And look at the company’s net-promoter score to understand how well the solution has performed in the market.