Home › The Complete Blog › Answering the Call for Financial Transparency: What Does Financial Transparency Mean for Hospitals, Physicians, and Other Healthcare Providers? August 31, 2022 By MIllennia Healthcare Consumerism Is Here to Stay Self-pay cannot be ignored as a major player in a healthcare system’s financial success. Consumer contribution to overall revenue continues to grow–35% of total physician practice revenue is contributed to patients18. Healthcare providers need to treat patients like a payor. They should have the patient experience front and center when determining the next wave of technology to drive revenue growth. Patients’ out-of-pocket (OOP) expenses will continue to grow. It’s projected that patients’ OOP expenses will grow by 10% year-over-year and reach $800B by the year 202619. Providers who proactively improve their systems to accommodate for this projected growth–rather than wait for government regulations to drive it–will outperform their competitors. The providers who figure out a way to simplify the patient payment experience will position themselves as patient-focused innovators. Their efforts will yield both a financial and patient satisfaction return on investment. The entire patient experience, including payments, plays a huge role in patient loyalty. Patients want transparency across all aspects of their healthcare experience. They especially want it when it comes to their healthcare bills. With 56% of patients willing to switch healthcare providers for a better payment experience, providers must get ahead of these expectations20. A huge revenue capture opportunity exists in the patient payment space. Healthcare providers collect an average of 22% of patient payments21. This leaves a tremendous opportunity for providers to capture more revenue–especially as the patient portion of a provider’s revenue becomes larger. Unfortunately, many providers lack insight into how much revenue leakage occurs in their patient payment bucket. 28% of providers don’t know how much they write off each year in patient collections22. The quicker an institution improves its ability to collect from patients, the better positioned it’ll be when an even greater portion of revenue comes from patients. So, what’s the secret to patient payments? Engagement. When providers put patients in the center of their payment solutions, they engage patients in the process. Engaged patients are happy patients. Happy patients pay their bills. One of the key factors to patient engagement is financial transparency. What does financial transparency look like? Over the past few years, the government has pressured healthcare providers and payors to be more transparent with patients. CMS rolled out requirements to give patients access to medical records, healthcare facility pricing, and “good faith” estimates. Regulations, industry disruptors, and patient expectations will continue to drive the need for more financial transparency. While these regulations can place burdens on providers to meet CMS guidelines, it’s the right thing to do for patients and when done right will lead to improved patient engagement. Example of how financial transparency improves patient engagement: Patients: Real-time access to simple billsAccess to easy-to-understand pricing BEFORE making a medical decisionReceive a user-friendly explanation of services that are renderedPresented with comprehensive payment options (e.g. flexible payment plans, ability to take several forms of payment)Given consistent messages from healthcare caregivers regardless of person’s role Physicians: Understand basic insurance information if asked questions by patientGiven real-time access to patient financial informationEasy to place orders that flow through the system correctly and follow guidelines Front-end staff: Provided with historical patient information (demographics, insurance information) that is verified automatically to reduce redundancies and errorsAble to explain pricing, insurance coverage, and payment optionsAccess to built-in tools to provide accurate, timely information to patients Billing staff: Access to comprehensive patient profiles that give them insight into upstream communications between patients and other employees. Access to built-in tools to provide accurate, timely information to patients about their billingViews historical documentation to research billing issues and reduce the need for patients to “retell their story” Financial transparency helps all those involved with a patient’s experience better inform the patient at all stages of their provider experience. While financial transparency offers many stakeholders and leads to greater patient satisfaction, the current healthcare ecosystem makes it difficult. Challenges for Transparency Too often providers have “unfinished business” with patients that prevents high engagement. This is especially the case with financial transparency. It’s understandable that when patients visit hospitals or physicians, their primary concern is their health, not their demographics or insurance benefits. So, it’s not unusual for financial information to get skipped or missed. Other contributors to inaccurate information include: Technology deficits: Unreliable technology can lead to low utilization and reliance on manual, less accurate methods for collecting information.Complex systems & siloed departments: Healthcare providers often have systems and people who work in silos. This requires patients to provide information multiple times or receive conflicting information from different departments. Ever-changing payor rules: Complex payor rules and contracts make data consistency challenging for many providers. This confuses the provider and patient.Multiple steps and checkpoints: Data is needed from patients throughout their visit. The opportunity for process breakdowns occurs from the pre-visit, time of visit, and post-visit points. If a seamless system is not in place, critical information is missed and can cause difficulties later during billing. 49.7% of insurance denials are due to breakdowns in the front-end revenue cycle23.Regulations: In some situations, financial information cannot be discussed until after medical triage. This presents opportunities for missed and incomplete registrations as well. Staffing shortages: Healthcare facilities struggle with maintaining their staffing ratios relative to patient volume. Processes get skipped that lead to incomplete information. These factors impact data integrity. The lack of complete data impacts the ability to provide full financial transparency. 18. Medical Group Management Association. 2019 Conference. 19. Granderson, Daniel. “US Out-Of-Pocket Healthcare Spending Swells to $491 Billion, Up 10%.” Kalorama Information, 2 August 2021, https://kaloramainformation.com/blog/u-s-out-of-pocket-healthcare-spending-swells-to-491-billion-up-10/. Accessed 30 March 2022. 20. InstaMed a J.P Morgan company. “Patient Billing and Payment Solutions.” InstaMed, 2020, https://www.instamed.com/providers/patient-billing-and-payment-solutions/. Accessed 29 March 2022. 21. Millenia. Millennia platform and provider payment data. 22. Best Card. “5 Statistics About Healthcare Payments in 2021 You Should Know.” Best Card Credit Card Processing for, 27 January 2021, https://bestcardpayments.com/2021/01/5-statistics-about-healthcare-payments-in-2021-you-should-know/. Accessed 30 March 2022. 23. Change Healthcare. The Change Healthcare 2020 Revenue Cycle Denials Index. 2020. https://www.changehealthcare.com/insights/denials-index, https://www.ache.org/-/media/ache/about-ache/corporate-partners/the_change_healthcare_2020-revenue_cycle_denials_index.pdf. Accessed 30 March 2022.