Q&A with TransUnion execs: Patients are the new payers

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 - TransUnion HFMA
TransUnion Healthcare's booth at the HFMA 2017 conference in Orlando

One of the most frequently discussed topics from the Healthcare Financial Management Association (HFMA) conference was the need to increase patient engagement when it comes to payment as out-of-pocket costs and deductibles continue to rise.

Jonathan Wiik, MBA, principal and lead of revenue cycle management solutions at TransUnion Healthcare, addresses this shift in a new book entitled “Healthcare Revolution: The Patient is the New Payer.” Along with TransUnion’s vice president of healthcare products, John Yount, he sat down with HealthExec at HFMA 2017 to discuss how hospitals should manage this change and whether it’s only a short-term fix.

HealthExec: The title says the patient is the new payer, though a survey you just released also says patients are now more than ever struggling to pay. What kind of impact is this having on the hospitals?

Jonathan Wiik, MBA: The study showed that 68 percent of patients with a bill of $500 or less couldn’t pay it or didn’t pay it. Asking that patient for that $500 financially engages that patient and you can then establish other things, like charity programs. Payer doesn’t necessarily mean that payment’s coming from the patient. It could be coming from the government or the hospital’s charity program. Ideally, it could come from the patient, but it could be from many different sources and establishing those sources upfront is why the patient’s a payer.

The (American Hospital Association) runs a report every year on uncompensated care. Right now, it’s $34.7 billion dollars. That’s a combination of bad debt and charity care. It did go down slightly because of the (Affordable Care Act) and the Medicaid expansion. There are predictions from the Congressional Budget Office and others that with the new healthcare bill, that number will actually rise again.

So that number is representative of bad debt and bad debt is a function not establishing funding mechanisms for patients, either through themselves, the government, their insurance company, whoever it may be. Profitability of the hospital will be detrimentally impacted if payments and financing options aren’t discussed with patients in advance.

Obviously, hospitals have to be paid. What do they need to do to get through to these patients who struggle to pay bills?

Wiik: I think hospitals need to do three things: 1) they need to educate their patients to the cost of their care, 2) they need to act upon that information once they have it and have a financial conversation with the patient, and 3) they need to enable their staff to have a passionate, collaborative and competent conversation with the patient.

Right now, most conversations don’t happen. It’s an envelope in the mail, three months later, and most patients when they get it, they’re like “What is this? How come no one talked to me?” That’s exactly what a hospital needs to prevent from happening by pulling that process as early as they can into the revenue cycle and just have financial conservations at every step they can. “Hey, we ran your insurance, you have a $500 deductible, we think it’s going to be about $300, can you afford that? If you can’t, let’s try to find some other financing options.”

How much on this new dynamic depends on getting new data, like identifying patients most likely to be unable to pay in full?

Wiik: I’d say a lot of it. There’s a very large benefit literacy gap in our country. Most folks can’t say what their benefits are. I bet you couldn’t. I’m in the industry and I don’t really know how much of my deductible I met this year. With data, you can know those things.

You can check insurance and find out what those accumulators are—how much is going to be payable from the insurance company or the patient. If there is not insurance, using predictive analytics to find out what’s their household size, what’s their income, and then you can kind of put them in payment lanes, like a patient who has a high likelihood of payment or high likelihood of charity or is in the middle who might need help paying over time.

John Yount: It’s been a big focus of our customers. If you look at what the (ACA) did around Medicaid expansion, there’s now a significant portion of the population that has Medicaid, and as a result, they fall under 133 percent of the (federal poverty level) and can be automatically eligible. In the cases where the patients don’t fall in that category, but they’re still under 400 percent, they have the ability to then assess what their financial assistance